The FAZ is a structure in which circulate negative rate bonds used legally “as is” money, with which you can create wealth through loans to companies and individuals, and with whom you can redistribute wealth through a basic income to all its participants. The FAZ consists of two subjects, one that issues the money in the form of negative rate bonds and one that accepts and redistributes them respectively which investment credits and life credits. (Note: the latin law legal entities are different from the common law legal entities, so these are to be further analyzed to understand if their features are effective and similar to latin law ones)
1. The FAZ Company. The Public Limited Company (PLC) is the entity which issues the not-money. It can be of two kinds, promoted by public entities (municipalities, provinces, regions, etc. ..), through public controlled companies, with which they can fund new public services and provide basic income to their citizens, without increasing their debt . Or promoted by private companies, through the establishment of a consortium company (syndacate), with which they can increase their business, fund new activities and deliver a social dividend to all members of the consortium, without increasing their debts.
2. The FAZ Association. The Association is the entity which accepts and redistributes the not-money. It consists of individuals, companies and associations. Receives investments’ funds, which distributes to natural and legal persons, and receives the basic income, which distributes to all members of the Association. Inside it there is a Scientific Committee that conducts research and development.
So the FAZ is of two kinds:
The Public FAZ, consisting of a public owned company (issuing entity) and the FAZ Association (entity of acceptance and redistribution). The relationship between the company and the Association is governed by a contract. The Public FAZ is carried out by the Public Entity by means of a public company which already exists and then it will enter into an agreement with the Association.
The Private FAZ, consisting of a private owned company (issuing entity), formed by member companies, and the FAZ Association. The relationship between the company and the Association is governed by a contract. The Private FAZ is performed by private companies through a consortium company – to be established by the member companies through the transfer of unredeemable credits (but not formally written off) to form the shares’ capital – which will enter into an agreement with the FAZ Association.
Issuance of negative rate bonds. To corporations is granted the right to issue bonds up to a maximum of twice the share capital, legal reserve and reserves resulting from the approved budget (in latin law). The company then emits negative rate bonds: a first issue for Investment Credit will be underwritten by the Association who will dispense shares to the associated companies and individuals to fund economic projects proposed by those, a second issue for Life Credit will be underwritten by the Association, who will dispense shares to associated individuals as universal and unconditional basic income.
The bonds will be issued to fund works, production of goods and services, and the rate will be determined by the company managers, upon the proposal of the Association Scientific Committee, taking into account the obsolescence average level of the goods and services produced, so that the life of the created money will be equal to the assets’ life created through investments. Bonds will be issued subsequently taking account of the consistency of production favoured by past emissions, otherwise they will have no justification. Automatic mechanisms for the money issuance and transparency in the accounts’ management will be fundamental FAZ principles, so that no one can have the power of decision in creation of money for investment. The goal is to avoid the possibility that arises a power on currency management. After the emission for investments, there will be an issuance to support demand through provision of basic income to all FAZ members. The circulation of not-money facilitates the creation and development of an economic circuit in which partners can find a market for their goods, as well as aiding the recovery of general well-being through the provision of basic income that stimulates demand.
At the end of the loan, if it is chosen to issue bond in the form of convertible bonds, is distributed by the issuer among the bonds’ holders a company’s share of a value equal to the rate of increase of wealth made from that investment, distribution which results in an individual credit capacity increase.
The negative rate bonds may be issued in two ways: (1) Materialized issuance. The issuance of bonds takes place in this way: on paper, in bearer form, with a fixed coupon, at par, with a negative rate of 5% annually, during twenty-year. The bonds are printed in paper form with free graphics, in units of 1, 5, 10, 50 units (i.e. Euros), and report the information required by law. (2) dematerialized issuance. The issuance of bonds takes place in this way: in electronic form, in bearer form, with a fixed coupon, at par, with a negative rate of 5% annually, during twenty-year. The electronic bonds are entered into a electronic bonds’ custody at a bank.
Accession clauses. The relationship between the FAZ members are governed by the Statute of the Association, by the Statute of the Company and by the contract between the Company and the Association. As the contracts are regulated by the law, can be foreseen in case of breach of contract (i.e. a member that get out the FAZ without authorization) financial penalties.
1) to accept, for the exchange of their goods, services and / or activities, to practice a reduction of the price in national currency (i.e. euro) of at least 50% and accept for the rest the negative rate bonds. Obviously, a firm may decide to allocate a part of their production activities within the association and to handle the rest in the national currency (i.e. Euros) as it is commonly done. The important thing is that the price is reduced by at least 50%, as well as the remuneration of the members’ activities will be reduced by 50% and the rest will be paid with the new money. This means that the Association will also become the occasion for meetings between labor supply and demand at conditions that will be supposedly better than the current ones.
2) to do not engage in price increases within the Faz and pricing its products in negative rate bonds;
3) to use for the transactions in negative rate bonds the electronic exchange system operated by the Association;
4) to accept that the bonds are burdened by a negative rate whose measurement is determined periodically by the Assembly of the Association within the range indicated by the Scientific Committee;
5) to accept that the company will emit and distribute negative rate bonds as Life Credit to all members according to criteria set by the Scientific Committee, which are generally commensurate with the total wealth of society (the so-called Social Capital);
6) to comply with the general operating rules and the decisions of the Association.
Tax aspects. For the fiscal aspects of the operation, the emissions can be considered as discounts of the list price of the goods and there is a precedent in this direction with decisions of the (italian) Tax Agency on the proper handling of receipts and invoices. Even the acceptance of a negative rate bond, which at the end will be near zero, can be considered as a discount on the total price, just because you take something in return, from the point of view of capital, is zero or close to it. In this respect, one can imagine that the Association is a structure in which it is practiced solidarity among the members who apply substantial discounts between them.
Costs. The costs for the FAZ creation are dependent on the amplitude of the circuit and the complexity of exchange that you want to implement. In general, however, the cost to be taken into account are:
- Administrative: Company and Association incorporation; printing costs for the issuance of paper bonds or holding securities custody for electronic issued bonds;
- Technological: personalization and program management account maintenance and construction and maintenance of the website and the server;
- Marketing: preparation and printing of publicity materials initiative and promotion activities;
- Management control. To make the management control it must be operating a research center that monitors economic activities within the circuit and carries out the analysis and measurements necessary to propose the decisions of its competence;