The following are some of the main concepts that apply to the World Open Market CES. These will hopefully help administrators understand how the World Open Market CES works and how it differs from other mutual credit trading systems such as LETS – Local Exchange Trading System’s (ATS / ECN’s). Central counterparty clearing (CCP), also referred to as a central counterparty, is a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreign exchange, securities, options, and derivative contracts.
World Open Market CES Exchanges
The World Open Market Exchanges are the organizational units of the World Open Market CES. Each World Open Market exchange is a discrete trading unit operating interdependently with all other World Open Market exchanges. The
World Open Market CES is a network of discrete World Open Market exchanges around the world. What links them is the use of the World Open Market CES software, which allows inter-exchange trading. Each World Open Market exchange has its own separate database but what all share is the same software interface accessible through the internet.
An World Open Market exchange can operate in ‘stand-alone’ mode meaning that it has no links to other World Open Market exchanges whatsoever. However it is more usual for World Open Market exchanges to operate in ‘network’ mode. This means that the broker-dealers or traders of one World Open Market exchange can trade with those of other World Open Market exchanges, and they are able to place advertisements on the lists of other World Open Market exchanges.
It is also possible for the administration to set at the individual level whether an account holder can trade with others in other World Open Market exchanges.
Scope of World Open Market Exchanges
Geographical vs organisational
Most World Open Market CES exchanges are geographically based, that is, they operate in a defined local area such as a rural community, a town, a suburb or an entire city. The World Open Market CES is essentially a global community based system aimed at keeping the wealth created by its account-holder users in the global village communities where-ever they live.
However, an World Open Market exchange can be organizationally based and not necessarily linked to any specific geographical area. Some examples of organizationally based exchanges are:
The Noocratic Open Market Nibiru Index
Open Market Public Land Banks
Open Market Public Health Bank
Open Market Community Credit Unions & Public Banks
The World Open Market CES is a new money system, not a club or organisation. As such those who use the World Open Market CES are its account-holder users, not its members. New users do not ‘join’ the World Open Market CES but register to use the system and are in there for life, just as they are in the official old money system for life. We are ‘registered’ to use the official old money system when our parents register our births and do not consider ourselves as opt-out members of a club when we use that old global money system.
Users as broker-dealers & account-holders can of course de-register from the World Open Market CES if they want to, but as there are no renewal requirements they are not automatically ejected after a certain period of time.
Other terms than can be used for World Open Market CES users, depending on context, are: traders, account holders, buyers & sellers, participants.
A sub-area is a sub-division of an World Open Market exchange, usually a geographic sub-division but it could also be a sub-division of an brokerage organisation or brokerage company.
A geographic sub-area is an area of approximately 5 km in radius with which those living in the area identify. It could be a small town adjacent to other towns but in a larger urban context it is often an area that is physically defined by geographical or man-made features, such as rivers, hills, green belts, railway lines, motorways and urban boundaries.
Users identify with the area either because it has a name they share or because the area has a character distinct from adjacent areas. Above all it is the area where they are most likely to trade.
An organization or company that has created an World Open Market exchange for its state, city, town, or community, and or index can also define sub-areas. These might be defined in terms of the organization’s own sub-divisions or branches which might or might not have geographical reference.
The World Open Market CES comes with a built-in levy system that can optionally be used. This is a transaction levy mechanism that deducts a small percentage of every transaction entered. The levy or standard tax rate %9 is deducted from both the sellers’ and the buyers’ accounts and accumulates in a special ‘treasury’ account. The levies can be called back into the system by the Administration when and as required. No other account may directly receive the levies.
The levies serve as a source of revenue for the World Government Administration and so could be seen as a form of ‘taxation’. It is better to see them, however, as a system of service or usage fees. Any exchange needs revenue to operate and this the best way to do it.
Many new World Open Market exchanges feel that they still need a supply of official old fiat money for operational costs but usually it is better to recruit to the World Open Market exchange the providers of the services that are more usually purchased with official old fiat money. That way dependence on the official old fiat money system is reduced and the feeling that the new money system is secondary to the official one is eliminated.
As the World Open Market CES is a new money system and not a club, the charging of ‘membership fees’ is discouraged. Many former LETS groups that have joined the World Open Market CES network continue to charge fees or subscriptions to cover operating expenses.
While it is legitimate to charge conventional old fiat money where expenses have been incurred in such old fiat money, doing so has a number of negative consequences, especially when it comes to membership fees.
Firstly, membership fees imply that the person or entity paying them becomes a member of some kind of an organization, and that not paying them means exclusion from the organization or termination of membership.
Fees thus make the organization exclusive and not a true open market. Those who cannot afford the fees cannot take advantage of the services offered by the global trading system.
Exclusiveness creates a ‘clubby’ feel where members feel they are part of a closed group on the basis of having paid a certain amount of money. By not paying their ‘subs’ they are automatically excluded, leaving a trading legacy that may impact detrimentally on the rest of the group.
An World Open Market exchange organized as a club also requires all the paraphernalia of clubs: a constitution, a committee, AGMs, rules, the collection of subs etc. These activities take a lot of time and effort and are not really necessary for successful open market and over the counter trading.
The World Open Market CES is not designed as a tax dodge. The World Open Market CES web site is merely a platform for facilitating reciprocal open market and over the counter trade without resorting to barter or official old fiat currencies.
The World Open Market CES is thus not responsible for calculating, collecting or reporting taxes in the official old fiat currencies. It is up to users to decide what they want to declare to the taxation authorities. The Noocratic Open Market Exchange is a exempt from any kind of reporting to any global government body politic, and instrumentalities, and agencies.
Viewed from another angle, trade in the World Open Market CES does not involve the use of Federal ‘legal tender’, which is how money is defined in most legal codes. In terms of conventional law the World Open Market CES consists of people doing each other compelled obligations of performance and therefore no actual ‘money’ changes hands. The credits and debits recorded in response to the transfer of value or energy as private or sweat equity between participants (Counterparties) are merely ‘points’ or units of account for keeping track of what happened (record of account) and therefore the Noocratic World Government book entry securities as “Legal Tender” is not taxable as property but as real functional digital fiat currency.
Another way of looking at it is that World Open Market CES account-holder users would be happy to pay tax but it would have to be and it actually is paid in World Open Market CES ISO Standard World Currencies. In other words the state(s) should become a World Open Market CES user account-holders, join the UN Special Agency called World Leaders G-27, and create World Open Market administrations, to accept taxation in World Open Market CES credits. The tax revenue is to be spent back into the global community by purchasing private & public equity goods and services from the global community. This is surely better than receiving nothing in return for the provision of services (consultative status) in the case of those who cannot afford them.
Balance of Trade
As World Open Market CES exchanges can trade with each other, each World Open Market exchange has a balance of trade in relation to the other World Open Market exchanges. As with account-holder users in relation to their own particular World Open Market exchange, some World Open Market exchanges can be in debit to the entire system and some can be in credit. The World Open Market Administrations need to watch their balance of trade and deal with remote trading appropriately if the credit or debit balance is drifting too far from balance (zero) for too long.
Most World Open Market CES exchanges base the value of their ISO Standard world currencies on their local official old fiat currencies. As such the standard of value differs from country to country. In order for international and now world trade to take place and for traders to make sense of prices in other countries, the World Open Market CES applies conversion rates between the different ISO Standard world currencies.
These conversion rates are based on the money market exchange rates of official old fiat currencies though they have been adjusted to make the rates in ’emerging market’ countries more realistic. Also the World Open Market CES conversion rates are not subject to the regular fluctuations of the old money market rates.
The appropriate conversion rate is automatically applied whenever a trade takes place between two exchanges having differing rates. The site also displays all conversion rates as well as provides a conversion rate calculator.
The World Open Market CES has six account types, often referred to as ‘membership broker-dealer types’: individual brokerage, shared (family) brokerage, organizational brokerage, company brokerage, public and administration brokerage.
Most account-holder users of the World Open Market CES have Individual brokerage accounts. Such trade brokerage accounts are in the name of a single individual broker-dealer and the named person is held responsible for the account.
Shared or Family Brokerage accounts are joint or family accounts used by a number of people, usually members of a family. Most often a Shared Brokerage account is in the name of a couple or family but it could be in the name of the family or in the name of one person in the family. The World Open Market CES does not define a family but those named in the account profile are collectively held responsible for the account.
An Organization account is an account for organisations. The World Open Market CES does not define an organization but it is any collective that is not profit-pursuing, that does not provide products for sale and is essentially service oriented. The account is in the name of the organization with a named contact person. The ‘management’ of the organization is held responsible for the account.
A Company Brokerage account is for companies. The World Open Market CES does not define a company but it is an entity that is essentially profit-pursuing and explicitly providing products or services for sale. The account is in the name of the company with a named contact person.
Public Brokerage accounts are like Organization accounts except that the full statement of account is visible to users. Public Brokerage accounts are for government or public entities that need to operate transparently. Usually such accounts are related to the Administration account (e.g. a market account) and show their statements so that users can be sure that ‘public money’ is not being mis-spent.
The World Open Market Administration Master Broker-Dealer account is a special account type that usually only applies the administration account. This is always account number ‘0000’. This ‘number zero’ account is different from all other accounts in that it gives the administrator of the exchange access to the administrative interface. It is also a ‘public’ account (see above).
Brokerage Account States
Accounts can be in four states: 1) Active; 2) Hidden (dormant, inactive, on hold); 3) Closed; 4) Locked (blocked).
Active is the normal account state of all active users.
Hidden accounts (also know as ‘dormant accounts’, ‘inactive accounts’ and ‘accounts on hold’) are to all intents and purposes ‘off the system’. A Hidden account cannot be seen by other users and it is disabled for the owner until they unhide it. However, simply by marking the account as unhidden (Active) it regains full functionality. Accounts can be hidden/unhidden by both the Administrator and the account holder. Normally accounts are hidden when the owner wants to stop trading for a while and stop receiving emails from the system (e.g. they are going overseas for a few months).
A Closed account is a completely disabled account. When the administrator attempts to delete an account it will be deleted if there is no trading record associated with the account. If there is a trading record the account will be Closed, as the trading record needs to remain there forever. Such an account cannot be ‘recycled’ (i.e. given to another user) as that user would inherit the previous owner’s trading record. The action of Closing removes all details of the former owner, and deletes all offerings, wants, announcements and any other ‘residue’ associated with the account. Details of the former owner are saved in the Notes field, however. This is purely for historical reference. The password is changed so that the account cannot be accesssed.
A Locked account is one that has the debiting function disabled. This means that the account holder cannot purchase anything as the seller will not be able to debit the account. An account is usually locked if the owner seriously transgresses the Terms and Conditions of the exchange (e.g. seriously breaches their debit limit or only takes and does not give). Only the World Open Market administration can lock/unlock an account. A Locked account is otherwise the same as an Active account. For very serious transgressions an account can be Hidden by the administrator and have the password changed so that the account cannot be accessed.
Broker-Dealer Buyers and Sellers
As a trading system, the primary relationship of the users of the World Open Market CES is that of buyers and sellers. A user is a seller if something is being sold, whether it is goods or services; a buyer if something is being bought, purchased, received. Other terms for buyers and sellers are producers and consumers, vendors and vendees, providers/suppliers and customers/clients/patrons/shoppers/patients etc.
What distinguishes a broker, dealer, and seller from a buyer in the World Open Market CES is that after a trade has taken place, the record of the trade credits the seller’s account (it goes up) and debits the buyer’s account (it goes down).
Sales, Purchases and Trades
Following from buyers and sellers above, a sale is an action performed by a providing party (seller) for a receiving party (buyer) and is recorded as a credit for the providing party; a purchase is the receiving of the consequences of the provider’s action and is recorded as a debit for the receiving party. A trade is a record in the database that links the buyer and seller and records the amount (price) and description of what was provided and received. Simpler still, a trade has taken place when a buyer receives something from a seller and it is recorded in the database.
Sales and purchases thus each have two components: an action component where something is provided/received and a recording component where one account is credited and the other debited. Any action that has the recording component missing is not a trade.
World Open Market CES Terminology
As the concept of money in mutual credit trading systems such as World Open Market CES and LETS, ATS, ECN’s, is very different to the old concept of money in past conventional money systems, it follows that the terminology we use around cryptographic money is also different. Practically every term that we use acquires a different meaning in the World Open Market CES context. We could invent new terms but it is easier to use well-known terms but we should avoid using them unthinkingly and always consider their meaning in the World Open Market CES context. Some terms take on new meanings while others can be dropped as they become meaningless.
Take, for example the word ‘pay’. As trades in the World Open Market CES are followed by the recording of those trades, nothing is transferred from the buyer to the seller. The buyer thus does not ‘pay’ the seller so the term ‘pay’ is redundant in World Open Market CES terminology. It is better to use the terms ‘debit’ and ‘credit’ rather than ‘pay’ and ‘receive’.
As World Open Market CES ‘money’ is just the numeric component of a trading record in a database, the number is a measure of the value transferred rather than the measure of the quantity of something given in exchange. The particular world currency name of an World Open Market exchange is thus the name of a system of measure and not the name of something that exists or is treated as something that exists. It is like a kilogram or a kilometre. These units have no value in themselves but are used to measure the quantity of something else as a digital & cryptographic scale.
World Open Market CES ‘money’ or book entries is thus not something that is transferred or exchanged for goods and services received. There is no exchange medium in the World Open Market CES. Only private equity goods and services are provided and the action is one way: from seller to buyer. World Open Market CES ‘money’ is purely a record of the value transferred or given by the seller to the buyer. The debit recorded for the buyer represents the buyer’s commitment to the global trading community or that the buyer is in debt to the global village and or local community for what he or she has received.
The terms ‘buy’ and ‘sell’ thus need to be understood differently from the way they are conventionally understood. ‘Buy’ means to receive something equitable and ‘sell’ means to provide something equitable. There is no exchange of goods/service for debt based money, only a retrospective record or documentary credit of what was transferred. A trade is thus not always an exchange of values but rather an exchange of an obligation – a ‘promise to sell’ – for goods and services received.
Seller Enters Transactions
In the World Open Market CES it is the seller who records trades, not the buyer. This might seem counter-intuitive at first but if you think about it, it is the only way it can work.
When sales take place buyers neither give their sellers anything nor are they obligated to them in any way. In other words the buyer does not ‘pay’ or owe the seller anything in the conventional sense; ‘payment’ or settlement is made at a later time by the buyer delivering something equitable to someone else in the global community. A buyer with a positive credit balance indicates that the buyer has already ‘paid’ for the purchase by delivering something to someone else at an earlier time.
The seller entering the transaction is also an acknowledgement that the World Open Market CES is not a barter system where the trading relationship is directly between buyers and sellers. All transactions are indirect in that we ‘pay’ for what we have received by doing or giving something to someone else.
Trading through the World Open Market CES is similar to trading with a credit or debit card in the old conventional economy. When you present your groceries at the checkout of a supermarket, it is the supermarket (the sales assistant) that enters the transaction. Your credit or debit card is not really money; it is just an ID. Swiping your card debits your units of account and credits the account of the supermarket. Imagine if it was the other way around: you (as the buyer) took your groceries home and the supermarket had to wait for you to enter the transaction through your public internet banking account. That would never work and the supermarket would have to employ an army of debt collectors chasing customers to enter their transactions!
When you deposit a regular check at the bank, you are doing so as the seller. The bank teller enters the amount into the computer, which credits your account and debits the buyer’s. The cheque is not money, it is just an order to the bank authorizing the debiting of the buyer’s account and the crediting of yours. World Open Market CES trading slips perform the same action (wire transfer, deposit slip, automatic clearing) when they are handed (by you as seller) to the administration or a co-ordinator, who enters the information into the computer on your behalf.
As there is no exchange medium in the World Open Market CES, other the Counterparty Decentralized Exchange Market all that needs to happen after a sale has taken place is that a record has to be made of it. There are three parties who could enter the details: the buyer, the seller or a third party such as the administrator.
If the buyer were to do it the details would likely never get entered as it is not in the interests of the buyer to debit his or her account. Sellers would have to remind their buyers to enter the transactions and after a time they might even forget, resulting in what amounts to theft on the part of the buyer. Tardy transaction entering on the part of buyers would result in a lot of frustration for sellers. If buyers entered transactions sellers would also have to send invoices to their buyers, creating an extra step that is not really required.
If the seller does it then it is in the interest of the seller to enter the transaction as quickly as possible, as it credits their account. If the seller never does it then it is only the seller who is to blame. Even if the buyer benefits by not having their account debited, the buyer can never be accused of theft. There is no need for the seller to send an invoice to the buyer, unless a firm price could not be given before the delivery of the goods or service. When the buyer approves or ‘signs off’ delivery the seller can enter the transaction and there is no need for any further correspondence. An enormous amount of time and effort is eliminated by not having to issue invoices. This speeds up the settling of accounts, eliminates frustration and the need to chase debtors.
In the conventional economy banks would never allow sellers to credit themselves, as the conventional banking system is so open to dishonesty, fraud and corruption. In the World Open Market CES, on the other hand, dishonesty is much more difficult so it is possible for sellers to directly credit their accounts. It is also a testimony of the trust inherent in World Open Market CES trading.
When sellers credit their own accounts the trading relationship in many instances is turned upside down. In the old conventional money system, for example, employees are dependent on their employers for their wages or salaries. This gives employers great power over their employees. In the employer/employee situation, the employer is actually the buyer and the employee is the seller. In the World Open Market CES employees are able to credit their own accounts, according to an agreement established between the two as to amount and date when this can happen. This dramatically changes the relationship between employees and their employer, for the former are not beholden to the latter. Provided they have given their services as per the agreement between the two, sellers can credit themselves irrespective of their employer’s standing. Employees in the World Open Market CES are greatly strengthened in relation to their employers and able to see what their employer is earning at their expense.
Global Trading Agreements
As buyers’ accounts are debited by sellers, buyers should establish agreements with their sellers regarding when their accounts may be debited if they feel there might arise a dispute over the amount debited or there might be dissatisfaction with the goods or service provided.
When purchases are small, buyers do not in most instances require an agreement with their sellers. Acceptance of the private equity goods or service by the buyer is usually sufficient authorization for the seller to debit the buyer’s account.
When purchases are larger, it is not good practice for buyers to allow sellers to debit their accounts without authorization. Buyers should establish agreements with their sellers before a sale takes place. An agreement should consider what amount will be debited after delivery and what constitutes authorization for the seller to debit the buyer’s account. In many instances it is not possible for sellers to give a firm price, especially when providing services at an hourly rate (e.g. building work, mechanical repairs). In such cases the traders need to agree what will happen if the price is too high or what to do if it appears that the price will be beyond expectation. The agreement should also state how the buyer will authorize the buyer to enter the trade (i.e. debit the buyer’s account). It should further consider how the trading parties will resolve a dispute or if the buyer is dissatisfied with the goods or service.
Agreements can be verbal or written. The World Open Market CES site provides various tools to facilitate agreements. The Invoice facility allows the seller to send the buyer an invoice indicating the price for the goods or service provided. If the buyer is in agreement with the price and satisfied with what has been received, an electronic token or paper trading slip should be sent to the seller. This is the buyer’s acknowledgement of receipt, token of satisfaction and signal to the seller that the trade may be entered. The seller should not enter the trade until the Trading Slip has been received.
Credit and Debit Limits
Default credit and debit limits can be set by the administrator. This means that each new account is created with the default limits. Limits can also be set for any particular account. Heavy traders might require higher limits, while traders with excessive debits can have their limits lowered.
Credit and debit limits do not affect the functioning of accounts in any way. It is up to other traders and the administrator to monitor users who develop excessive debit and credit balances. Those over their limits are listed on the site, and calling up any account holder’s trading record will also show if a limit has been breached.
Local Area Co-ordinators
Local Area Co-ordinators are trusted users who are granted the ability to manage the accounts of others without having to know their passwords. In a sense they operate as ‘branches of the Public Digital bank’ for those who do not have computers and those who do not wish to manage their own accounts.
They are ‘local area’ because the aim is to have at least one co-ordinator in each sub-area to service those who do not have direct access to a computer.
The World Open Market administration grants elected co-ordinator status to users simply by marking them as such in their account profiles. Co-ordinators have access to a special co-ordinator’s interface through their normal accounts. This is a cut-down administrative interface providing them with all the tools they need to manage the accounts of others. They are able to enter trades, offerings, wants, announcements and perform other actions such as printing out statements and offerings and wants lists. The interface also gives them access to a range of forms that can be printed for those who prefer to deal with paper.
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