Job creation, 22 carat

China is probably moving towards using its own currency for international exchanges, but reluctantly. It now encourages its own population to buy gold, whilst forbidding its export. Possibly with the intention of using it to back its own currency. The use of the dollar for international trade is no longer viewed favourably by China, as it allows the USA to create money to buy oil, and the cost is born by the lowered value of everyone elses dollar holdings. The revolutionary government will follow this example, by encouraging the manufacture of jewelery. Hall marking will be free for 22 carat gold, and where the value of 22 carat gold included in jewelry exceeds one third of the selling price, it will be VAT exempt. Exports will be allowed, and given that England has many skilled jewelery makers, this should create many jobs, as gold flows into the country and is paid for by jewelry flowing out. I am sure that those with money will also take the oportunity to buy the occasional item.

Workers supplement

Working tax credits to be phased out over a year and replaced by a workers supplement in the form of silver coins called shillings, worth £5 at the outset, but the exchenge value will be adjusted so as to maintain the purchasing power in the face of inflation, so becoming £6 in about 6 years.

China now sees western currencies as simply representing government debt and has reached an understanding with countries such as Brazil, Russia, India, South Africa, The United Arab Emirates, Chile, Iran and Japan to use their own currencies, or barter, instead of the US dollar for international exchanges. We will need to have something these countries want if we are to continue to buy from them. Although to begin with the shilling will have value because it can be exchanged for the pound, in a few years the pounds value will be supported because it can be exchanged for the shilling.

The workers supplement will be paid pro-rata for part-time working. The full rate will be for full time on minimum wage to minimum wage plus 30%, and above that it will reduce by 14% of your income above 1.3 times minimum wage, so it will reduce to zero at about 500 pounds a week.

The supplement is only for certain types of worker. Those who work in industry or construction and who do the actual work, including maintenance, cleaning, but not what might be described as office or management work. Farm workers who actually do the real work are included, and telephone switchboard operators, and call centre operators who recieve calls from the puplic.

The idea is to encourage home manufacture of goods instead of impoting them from china and the like. Call centres are another type of job that is leaving the country. But the new govenment will encourage telephone operators based where the real work is done rather than call centres, except where it is geuinely a central place of allocation.

The jobs excluded are the service industries, office jobs, and shops. Jobs working on computers, are excluded, but manufacture maintenace and repair will be included.

Repair work of all kinds will be included, this is usually better for the environment and often saves on imports.

Manufacturing industry workers need encouragement

The world is changing. For 200 years England was the most powerful force in managing world trade, certainly together with the other major world powers. The trade certainy wasn’t all fair, but the monetry system worked. If the king increased taxes, the workers would have to earn money and then give the actual coins to the kings men. Ask too much and revolution would threaten. At least then it was fairly clear when you were being robbed.

For the last centuary world trade has been based mainly on the dollar. First it was backed by gold, and this was abandoned in the 1971. There have been many financial booms and busts. A gram of gold in 1914 cost about half a crown, now it costs £ 33 or 264 times as much. Or, a penny in 1914 would buy more  than a pound buys now. In fact gold has risen in price in real terms, but even so the pound has shrunk to about 1/100th of its value in 1914.

The Chineese used american dollars for their international trade and bought US bonds with their savings for many years. They stopped last year as they felt the rate of devaluation of the dollar exceeded the interest and so they are loosing money.

Between 1999 and 2002 Gorden Brown sold 60% of the UK’s gold reserves. The UK  sold about 395 tons of gold  at an average price of about US$275 per ounce. current price $1.600; The UK holds 310 tons of gold reserves. France for example has 2435 tons.

The revolutionary government will abolish working tax credits and instead give workers in manufacturing and construction industries, a new currency equivalent to the victorian shilling, which will be legal tender and exchange initially as one shilling equalls five pounds. It will be issued in real sterling silver coins containing 5.24 grams of silver. Each eligible worker will receive 5 shillings a week from the government via the post-ofice as a supplement to their wages. No bank account may be created in the new currency. Credit unions may open accounts, as these have to be fully backed by sterling or storing the new coins.

Money should represent work.

The new government will need to make changes to the whole meaning of money. Money should be a devise to facillitate work and commerce, and avoid the need for barter. That way you do work, get money and use it to buy goods and services, which are provided as the result of someone elses work. Untill the first world war, the money in use was worth something, it was made of silver, and larger sums of money were gold or paper backed by gold. For 200 years from about 1700, England controlled a large part of the words economy, with its Empire, and as a result of the Industrial revolution. It more or less managed to keep money stable througout that time. A shilling would buy around the same amount througout that period. There were problems of course, but they were not caused by money itself. Now most people only have a figure on a bank’s computer screen.

With-profits investment with a life assurance company

The short version here is that with-profits endowment policies worked very well before the mid 1980’s. You paid a fixed amount in over 10, 15 or more years and you got a fixed amount out at the end of the term, plus bonuses added each year and a final bonus at the end if things were going well. Over the years the larger companies built up very large reserve funds and these were a good garantee that even in bad times you would get the garanteed amount plus the bonuses already allocated. The full amount would be paid out if you died during the term. Stability was the word here. Companies had a record of 100 years or more of faithful service. Then the stock market got more unstable as the get rich quick follow the crowd, boom and bust took over. The Financial services authority (FSA) took over and started giving orders. It put its own pensions in the hands of Equitable Life, which didn’t pay commission to brokers, interfered with broker commissions, did nothing to control Equitable life or warn of its perilous financial position in the 1990s. When share prices fell in 2000 it ordered insurance companies to invest less in shares, just at the time they were a bargain. In finacial services steadiness is required, regulation also needs to be steady, but if a limit on share investments is to be intrduced it needs to be when shares are doing well. Properly regulated with profits investments are excellent for their proper purpose, which is fixed term, for money you understand you can’t have till the term is up, or if you do you might lose some of it. The Revolutionary government will encourage Mutual Assurance companies to offer with-profits policies. I say this in the full knowlege that they are not really recomended by anyone.