LOTS'
birth was July 1998 in the North of New South Wales -Australia- at some
local markets and has been launched online at the same time as the 7POWER7
network (7/7/04) by the Founders of 7POWER7, Alcy and Tara Infinity.
The LOTSystem is a system managing an alternative currency called "LOT"
which is only valid inside a community of people who are committed to
using it.
The "LOTS" is a relative of the "LETS" - Local
Exchange Trading System-
Its main characteristic is that it is based on generosity and not
expectation, on offering and not exchanging. Giving creates a vibrant
win-win situation.
The LOTSystem has been designed to address locally the chronic shortage
of purchasing power (money) and empower communities with tools to reduce
this problem.
Money gets its value, not from gold, but from the products which that
money buys.
We all have lots to offer and less "means" to obtain. LOTS
is a system which provides alternative means to acquire what we can
produce, and eventually increase our production to its full potential
locally, inside a community, which can be very large.
The idea for the LOTS comes from the fact that most people have the
capability to produce much more than what they do. Why don't they
do that? Because there is a lack of money. They can hardly sell what
they already have, they have already too much stock for the demand.
So the LOTSystem provides an alternative currency which is used to sell
and acquire this excess of products. A large community lacking
of money is as ridiculous as running out of centimeters for the building
of a house.
Money is only a tool to allow a smart distribution of goods and services
in a community. Money is not a product itself but a tool to distribute
products smartly. By making money rare, money makers are transforming
money into a product they can sell for more than what it is worth,
by lending it with interest, until all the money in circulation belongs
to them and is due to come back to them, which gives them immense
power. Especially in a primitive world like ours where too many people
kill other Human Beings simply because of money.
Here are the guidelines and rules of the LOTSystem:
- Creation of a LOTSystem:
A LOTSystem gets born with the decision of a community of people,
the participants, to use the LOTSystem and the election of a the
group of people who will manage the system: The LOTS Council. All
participants have to support the Fundamental
Human Rights!
- Management of the LOTS:
The management of the LOTS has to be taken care of by a group of wise
truthful people, trusted by the community: the LOTS Council.
The community can decide how many participants are part of the LOTS
Council and who is part of it.
Every transaction with LOTS is reported to the LOTS Council which
keeps the LOTS accounts of all participants up to date and records
transactions to prove the integrity of the system and possibly correct
mistakes. The community decides how these reports of transactions
are done (Internet, fax, phone, radio, paper).
New members start with an account of zero LOTS and are not allowed
to use the LOTS they don't have. Debts are not possible in a LOTSsystem.
Every week a certain amount of LOTS can be added or subtracted from
all LOTS accounts in harmony with the increase or decrease of production
of products and services on offer. If an amount is subtracted from
an account which is already small, it might be set to zero but not
become negative. The facts that it is debt free, related to the products
and services on offer and the possibility of a creation of LOTS offered
to all participants regularly, in an even way, are fundamental differences
with a LETSystem.
With a LOTSystem, people don't have to wait to OFFER what they can
supply, and they can receive lots in return.
- Value of 1 LOT:
10 LOTS should be enough for a small meal for 1 person, 20 LOTS should be enough
for a good meal, 30 LOTS should be enough for a very good meal according
to the average participant.
- Presentation of the LOT unit:
The LOTS are only digital, only numbers in computers, or if there
is no computer, the LOTS are only numbers in a book. LOTS cannot
be printed nor forged. LOTS have no material reality (cash less:
no coin, no paper money, etc.). It is far easier to maintain the
LOTS accounts with computers and the Internet, however the community
can decide if the requests of transactions can be done on paper
as well and find ways to authenticate documents.
Each participant has also to keep a record of their transactions,
in case the books or computers containing all the information of the
LOTS accounts are lost or robbed, in order to reestablish the proper
amounts in each account.
- How many LOTS circulate?
This is the issue which makes the LOTS so powerful. The LOTS can be
created wisely by the team managing the LOTSystem, the LOTS Council,
BECAUSE they are kept informed about the products and services on
offer. The LOTS in circulation can be a direct representation of
this figure and therefore will always be valuable. Creating LOTS
regularly allows the increase of production to be distributed
in the community. It will depend if the production concerns a product
which can be produced in abundance, if it is perishable, if the
demand is high, if the demand is renewable, if it can be distributed
easily, how regular the demand is, etc. in other words it will depend
on the offer and the demand and has to be done with common sense.
It will also depend on how fast the LOTS circulate, as a momentary
lack of LOTS could be compensated by a momentary faster circulation.
Any injection or suppression of LOTS are done in an even way for all
participants. However, if there is a suppression of X LOTS, accounts
with an amount inferior to X will be set to zero. No account can become
negative because of a withdraw of LOTS decided by the Council.
Participants are not allowed to have negative accounts and can only
use the LOTS they have. Suppression or creation of LOTS are only done
once a week.
The LOTS Council records every week the products and services offered
by the community, available for all, and evaluates if there is a need
of injection or suppression of LOTS. Ideally, if the community keeps
offering, suppression of LOTS should be rare. However, it has to be
possible to suppress LOTS to prevent inflation and keep the value
of 20 LOTS enough for a good meal.
It is also possible to have a suppression and injection of LOTS at
the same time, the suppression is done first, and the injection second.
This could be useful when the LOTS accumulate in a few accounts and
don't circulate well inside the whole community.
- Wealth in LOTS:
The wealth of the community in LOTS depends on 3 things: the total
amount of LOTS in the community, the average amount of LOTS in the
LOTS accounts, and the speed of circulation. If each LOT is used
10 times a day instead of once it will multiply by 10 the wealth
in LOTS of the community using them. So participants are going to
be encouraged to use them as much as possible, as quickly as possible.
If they are afraid of lacking of LOTS and save them for later, they
don't understand that the LOTS are only valuable when they are used.
The community will never run out of LOTS as long as the community
offers something because the LOTS are a direct representation of
what the community offers. If LOTS are not used, then the community
will not benefit from the abundance that it could potentially offer.
- Is the LOTSystem only for participants? Can the LOTS be offered
to non participants?
NO. Every transaction of LOTS is done from one participant to another.
The participants who don't know each other can check with the Lots
Council if someone is truly a participant or not. If robberies are
done by people who pretend to be participants, then because the products
are being offered at the first place, this should not leave such a
bad impression to the person who has been robbed. Robberies can be
reported to the LOTS Council to improve the system and prevent further
robberies..
- Trading with LOTS:
There is never any obligation to trade with LOTS. Participants can
trade:
1/ All their products in LOTS.
2/ A part of their products in LOTS only.
3/ A part of their products in LOTS and an other currency. (the effect
is similar to offering a discount)
- Cost of using the LOTSystem:
Using the LOTSystem has to be free. Noone should be paid to run the LOTSystem.
No fee should be charged for any service of the LOTS Council. No transaction
fee. No weekly, monthly or annual fee. No account fee. No set up fee. No fee
for using or not using LOTS.
The members of the LOTS Council have to be benevolent, they don't receive any
salary for their work related to the LOTSystem.
- Is there a limit for the amount of
participants:
No. The more participants use LOTS the better:
1/ It accelerates the circulation of the LOTS. The more they circulate,
the more trade will occur which will benefit everyone.
2/ It will help trade to continue during the whole week.
3/ It will encourage the production for the following week and repeat
trade.
- Validity:
The LOTS are valid for as long as the LOTS Council decides.
- What happens with the LOTS at the
end of the period of validity?
At the end of the period of validity, the accounts in LOTS can be saved and
stored for the time when the community decides to use them again.
- Legal issues:
a/ Taxes concerning trades in LOTS are strongly not recommended
of course and if they exist, they should be in LOTS only, not
in other currencies. Accountability for taxes incurred by users
of the LOTS is the obligation of those involved in trade, the
LOTS Council should have no obligation or liability to report
to taxation authorities or to collect taxes on their behalf.
b/ The LOTS Council doesn't give any warranty or undertaking as
to the value, condition or quality of the items offered in exchange
for LOTS.
c/ The LOTS Council has to keep precise records of the LOTS accounts.
While all information on these accounts is considered personal and
confidential, the LOTS Council cannot guarantee that confidentiality,
or necessarily be held liable for any breach of it. The integrity
and honesty of the system is more important than the protection
of privacy concerning the records of transactions of the participants.
d/ The LOTS Council can decide at any time to stop the LOTSystem
as long as they give to the community at least 3 months notice.
It won't be liable for any compensation or reimbursement to participants
who have remaining LOTS in their account. The community can decide
to elect another LOTS Council if they wish to continue. The LOTS
Council is not allowed to erase transactions in LOTS accounts without
the approval of the community. The LOTSsystem BELONGS to the community.
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- WHY IS IT BENEFICIAL FOR EVERYBODY
THAT MONEY CIRCULATES QUICKLY?
Let's explain with an example. Let's imagine a community of 3 people trading
at a local market, 3 stall holders: the Masseuse,
the Fruitier and the Candle maker. Let's imagine that the Masseuse needs $10
for fruits, the Fruitier needs $10 for candles and the Candle maker needs $10
for a massage. Let's suppose that, at the beginning of the market, they all
have $10. At any time during the market they can go and buy what they need.
Now let's suppose that they are all lacking in money and start the market with
only $2.50. The Masseuse goes to the Fruitier to buy only $2.50 of fruit, as
she cannot afford more but tells the Fruitier that she might come back later
if she has "a
good day".
The Fruitier goes to buy $5 worth of candles. Then the Candle maker goes to
the Masseuse and give her $7.50 for a massage and tells her that he will
come back later with the money owed $2.50. The Masseuse can now afford the fruits
she needed. Like the Masseuse, the others will be able to purchase their needs.
So it has taken more time but the lack of money has been compensated by an increase
of the speed of circulation. More transactions have been done.
But what happens if one of them decides to keep what he has earned to pay an
old bill or a debt and instead of starting with $2.50 they start only with $1???...
There will be even less money in circulation. Now the stall holders really think
that they cannot afford to buy what they need as it becomes harder and harder
to make money. This is the spiral of the depression.
The LOTSystem can be very helpful in a period of looming depression like this
one. The LOTSystem contributes to prime the pump of the purchasing power and
stimulates its circulation which benefits everyone involved in the trade.
Let's suppose that the participants have 10 LOTS at the beginning of the trade
and that all three (Masseuse, Fruitier, Candle maker) are willing to use them.
The Masseuse goes to the Fruitier and buys with her 10 LOTS half of her needs
in fruits; then the Fruitier can go with his 20 LOTS and buy all the candles
he needs for the week and the Candle maker can go to the Masseuse and buy the
massage that he needs; and the LOTS can continue to circulate until all the
needed products are purchased.
The Masseuse realizes that she wouldn't mind having some beautiful candles as
well, and goes to see the Candle maker, but the candles she wanted have been
already sold to the Fruitier. However the Candle maker tells her that he will
come back with more of these candles at the following market.
They all realize that what they are making is appreciated by the community and
they are encouraged to improve and increase their production.
Therefore it is beneficial for everybody that LOTS circulate quickly
as:
- All the participants in the trade get wealthier.
- It creates a stimulating atmosphere for the economy.
A system which respects the conditions above can be called "LOTSystem".
If you want to support the use of this tool, JOIN
the LOTS network (form 2 on 7POWER7 site)
Alcy and Tara Infinity
Founders of 7POWER7
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