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Discussion: Cooperatives

Equity Ownership Structures Part I

We discuss Co-ops (short for Cooperatives). What are they and how are they significantly different from publicly traded companies, non-profit corporations, and privately held for profit companies? We discuss their strengths and weaknesses. We look at biblical models such as Acts 2 and 4 and compare and contrast them.

Some History of Co-ops in USA:

Founded 1752 in Philadelphia, PA

Earliest known US co-op in the form of a mutual insurance company – owned by policyholders

https://1752.com/blog/about-us/history/

Founded 1930 in Hanson, Massachusetts among 3 cranberry farming families

Example of a vertically integrated farming co-op whereby the farmers own the company.

https://www.oceanspray.com/en/Our-Story/Ownership

Founded in 1938, Seattle, WA

Formed as a consumer co-op where by the customers own the company

https://www.rei.com/about-rei

Founded 1908, Manchester, New Hampshire

First credit union in the US, as a cooperative bank owned by depositors and loan holders

https://www.stmarysbank.com/nav/about-us/history

Key Attributes of a “Co-op”

  • Alignment of interest around an affinity group
  • Pool resources together to better achieve business objective / common goal
  • Mutual and broad ownership with “one man, one vote” governance structure
  • “Profits” are distributed back to owners based on various fairness metrics, such as policy value, agricultural output, deposit/loan amount, or sales volume
  • they are “Non-profit” in the sense that the income statement balances to zero after dividends and/or member benefits are paid out
  • Opt-in and opt-out provisions for agricultural / supplier co-ops
  • Lifetime membership for some consumer co-ops including credit unions and insurance cos
  • Avoids hostile takeovers, capital stripping, over use of leverage, etc. found in publicly traded cos.

Other types of “Co-ops”

  • Housing / Coop Apartment buildings / Condos
  • Student unions
  • Preschools / Child care
  • Utilities
  • Workers
  • Food / Farmers Market
  • Retail / Buyers Clubs
  • Business
  • Arts / Crafts / Performance / Theater

We compare the strengths and weaknesses of the cooperative structure to other equity ownership structures.

Discussion: Lending Club

What is a lending club? We discuss the OMC and NECAP examples. What is it? How does it work? It’s the “Storehouse” in action…

Rules

1. The first rule of Lending Club is: You do talk about Lending Club

2. The second rule of Lending Club is: You do talk about Lending Club

… wait a second – no but seriously ….

Scriptural Rules for Lending Club

1. Do not charge your brother interest (Deut 23:19); 2. Do not charge interest to the poor (Deut 22:25)

2. Forgive debts every seven years (Deut 15:1)

3. Return the pledge (do not hold collateral) (Ezek 33:15)

4. Don’t expect to be repaid (Luke 6:34)

5. Lend to your enemy (Luke 6:35)

6. Freely you have received; freely give (Matt 10:8)

7. Open your hand wide to the poor for their need (Deut 15:8)

8. Borrower repays principal under God (Psalm 37:21)

But wait, that’s impossible, right?

Everything is possible for one who believes.”

Mark 9:23

Discussion: Storehouse Retreat Debrief

We cast vision for the Storehouse alternative banking strategy of God and discussed new possibilities and potential partnerships with others in Lindale Texas (see attached presentation).

The Storehouse includes: savings, payments, community investment, local currency, advancing the Kingdom, and more. It’s God’s biblical way of lending (non-hard recourse; non-forced interest), with a focus on discipling people to create Kingdom business/ministry opportunities, receive seed investment, get out of debt and into capital surplus in order to become an investor/lender, paying it forward for the benefit of others in the community.

Roundtable Discussion: The Storehouse

What is the Storehouse alternative banking strategy of God?

We discuss further.

The Storehouse includes: savings, payments, community investment, local currency, advancing the Kingdom, and more.

It’s God’s biblical way of lending (non-hard recourse; non-forced interest), with a focus on discipling people to create Kingdom business/ministry opportunities, receive seed investment, get out of debt and into capital surplus in order to become an investor/lender, paying it forward for the benefit of others in the community.

Discussion: Alt Currency

Inflation Part 2

How to deploy God’s “Storehouse” strategy of banking which can utilize an alternative community currency to the US dollar as a hedge against Inflation. The alternative currency would still be convertible to and from USD using payment bridges.

Everyone then who hears these words of mine and does them will be like a wise man who built his house on the rock. And the rain fell, and the floods came, and the winds blew and beat on that house, but it did not fall, because it had been founded on the rock. And everyone who hears these words of mine and does not do them will be like a foolish man who built his house on the sand. And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell, and great was the fall of it.

Matthew 7:24-27

Within a community, there lies an opportunity to encourage and stimulate the local economy, whereby the people of a given area agree to accept their own currency in lieu of US dollars. This does not remove the use of USD, but it runs in parallel to it.

BerkShares local currency
W.E.B. DuBois born in Great Barrington

An example of this is BerkShares which was a local currency created in 2006 and is accepted by 400+ merchants in the Berkshire Region of Western Massachusetts. Here is a good article in the Boston Globe.

Saugatuck Bank, Westport CT local currency 1860

Here is a different example of a Westport CT local bank issued currency (these are the printing plates) from 1860. Because banks today are regulated by the Fed, they deal only in Federal Reserve Notes (USD). But that wasn’t always the case! And what if the Fed fails?

We continue to discuss why inflation is coming. Another good perspective on this is from Ray Dalio, who manages the largest hedge fund in the world Bridgewater Capital, also based in Westport CT. While I don’t agree with Ray’s approach to economy and investing, he is an astute observer. And here.

Hockey Stick Increase M1 Money Supply

Finally, we have received another wake up call from the Fed itself when it announced at the beginning of the year that it would stop tracking ANY of the money supply. Yes, you heard that right, for years everyone tracked M1 and M2, which are our US measures of money. But the problem is when the Fed started printing money during the pandemic and the Fed government sent out stimulus checks and PPP loans, the money supply exploded. M1 took off like a rocket. This is also a sign of inflation. The fact that the Fed is not really explaining why it took this action, is also problematic.

Weimar Wheelbarrow of Money

This just in: 3 Americans – Buffet, Bezos and Musk are wealthier than the bottom 50% of all Americans. Mmmm.

There was not a needy person among them, for as many as were owners of lands or houses sold them and brought the proceeds of what was sold…

Acts 4:34

Cryptocurrencies as of April 29 were worth more than $2 trillion, according to CoinDesk, an information service, roughly equivalent to all U.S. dollars in circulation.

WSJ excerpt from “It’s Raining Money! What Happens When It Stops?

Discussion: Inflation

Last July, we discussed the Inflation Prophecies which you can read here as a refresher. Then more recently, our discussion of the National Debt delved into the “what if” of if the US ever lost its place as the reserve and settlement currency of the world, and how that could lead to even hyper-inflation. As we talked about, China and Iran are already making inroads to settling oil and energy products outside of the USD, including the US Fed wire / SWIFT banking system.

Just today Janet Yellen hinted that the Fed may need to raise interest rates in the medium term. Jamie Dimon, the CEO of the largest US bank JPM also said inflation is here but “everyone should enjoy it”. Warren Buffet also said inflation is more than expected. This is news. Reason being – stimulus spending and asset purchases through loose monetary policy, aka more debt.

No raising rates if inflation goes above 2% “temporarily”

The Fed and Jerome Powell have also raised their inflation target to above 2% rather than traditional measures of keeping inflation below 2%.

The spigot of government spending and Fed backed lending that is now wide open through the various Fed lending windows, to banks, corporations, municipalities. This in turn has led to massive increase in asset purchases such as housing, land, stocks, commodities, land, gold, precious metals and yes – Bitcoin.

Zimbabwe Note – 100Tn ?!

Third Seal: Scarcity on Earth

When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.”

Revelation 6:5-6

So, what to do? That will be the nature of our discussion. How the “Storehouse” alternative banking and currency strategies can respond to these issues.

Discussion: Bitcoin from a Christian perspective (Crypto Currency Part 2)

Bitcoin was the first cryptocurrency to successfully record transactions on a secure, decentralized blockchain-based network. Launched in early 2009 by its pseudonymous creator Satoshi Nakamoto, Bitcoin is the largest cryptocurrency measured by market capitalization and amount of data stored on its blockchain. The Bitcoin software is free and available online to anyone who wants to run a Bitcoin node and store their own copy of the Bitcoin blockchain. As Bitcoin matures, engineers have designed additional protocols to improve the speed and privacy of Bitcoin transactions, including the Omni LayerLightning Network and Liquid Network. Only approximately 21 million bitcoins will ever be created. New coins are minted every 10 minutes by bitcoin miners who help to maintain the network by adding new transaction data to the blockchain.

Coindesk.com description of Bitcoin

Last September, we explored the subject of Crypto currencies, decentralized finance (DeFi) and blockchain technology for applicability to financing the works of God here on the earth, including an alternative currency. The biggest Crypto by far is Bitcoin. So we are going to do a bit of a deeper dive into it in this discussion… This post / podcast is worth reading / listening to by means of review: https://newbreed.co/2020/09/01/crypto-currency/

Sept 2020     1 Bitcoin (last time we talked) $11,500
April 2021   1 Bitcoin (as of this email) $55,043

What has happened since:

  • 10/8/20 Square / Jack Dorsey $50m purchase of Bitcoin
  • 10/21/20 PayPal clients can purchase Bitcoin; Venmo 2021
  • 12/16/20 MassMutual insurance buys $100m Bitcoin
  • 12/20/20 Square Cash announces “Bitcoin back”
  • 1/31/21 Twitter / Dorsey brands “#bitcoin” with bitcoin emoji
  • 2/2/21 CALPERs increases Bitcoin miner RIOT stake to $441m
  • 2/4/21 “Dogecoin is the people’s crypto.” Elon Musk tweet
  • 2/8/21 Tesla $1.5Bn purchase of Bitcoin; Bitcoin as payment
  • 2/18/21 Robinhood announces clients Bitcoin buy and sell
  • 2/23/21 Square / Dorsey $170m purchase of Bitcoin
  • 3/30/21 PayPal clients can settle transactions in Bitcoin
  • 3/17/21 Morgan Stanley high net-worth clients can buy Bitcoin
  • 4/14/21 Coinbase goes public at $250/s – closes $338

Few other interesting tidbits:

A friend forwarded me this Tweet:

Bitcoin is an exit from the Fed.
DeFi is an exit from Wall Street.
Social media is an exit from mass media.

Homeschooling is an exit from industrial education.
Remote work is an exit from 9-5.
Creator economy is an exit from employment.

Individuals are leaving institutions.

@Naval Tweet on 1/2/21

A nice quip, but is it true??

  • Example: Bitcoin is traded through exchanges and held in wallets that are regulated
  • Example: Virtually all USD lending is done through the Fed
  • Example: 75% of US GDP and 50%+ of all jobs come from the Fortune 500…big institutions getting bigger

700 Club video just published yesterday on Bitcoin, which was pretty good: https://www1.cbn.com/cbnnews/world/2021/april/understanding-the-bitcoin-revolution-and-why-its-likely-to-change-the-world

Bear Case for Bitcoin:

NYU Economist Roubini believes Bitcoin is a self-fulfilling bubble as transaction costs are too high as a means of payment : https://www.bloomberg.com/news/videos/2021-02-17/bitcoin-is-a-self-fulfilling-bubble-roubini-warns-video

Bull Case for Bitcoin:

ARK Investing Founder Cathie Wood (a professing Christian) believes the ability of crypto and bitcoin and other advanced technology cos to change and advance the economy of the world (such as Tesla and Space X) are so great, we have an order of magnitude of future investment appreciation https://www.bloomberg.com/news/videos/2021-03-08/cathie-wood-on-market-broadening-out-tesla-retail-investors-video

Satoshi Nakamoto

What is needed is an electronic payment system based on cryptographic proof instead of trust,
allowing any two willing parties to transact directly with each other without the need for a trusted
third party.

2008 Bitcoin white paper p1

Is God is looking to replace trust in Him and people with cryptographic machine trust?

The word “Crypto” comes from the Greek word kruptós, meaning ‘hidden’, ‘secret’ or ‘in the dark’.

Another friend asked me the other day what I thought of the decentralized nature of Crypto as it relates to creating an alternative Christian banking system, and this was my response :

Crypto, block chain, and DeFi are all good/interesting technology and ideas. Bitcoin, etc. not so great given price mania of its implementation. Bitcoin and most crypto-currencies also try to replace human trust with machine trust (which isn’t biblical). So, if you combine the tech with human relationships, bypass the legacy financial systems and the Fed while using removable bridges, back it with physical tangible value, you have what we are prototyping in the New Breed of Business.

Discussion: Affordable Housing with Christopher Lucey

Chris Lucey is the CAO of JAMA Global Foundation (Jesus Awakening Movement for America) and member of the Joint Executive Team (JET). Prior to this he was the Managing Director of Frontiers Ventures (formally the US Center for World Missions).

JAMA is building a “collaborative kingdom community”. A mix of advanced program offerings challenging emerging leaders to top-level senior executives/ elders. JAMA is raising up the next generation of global servant-leaders, business innovators and missionally-minded entrepreneurs and thought leaders.  

Christopher is transforming JAMA (2.0) by leading a pioneering work that includes creating housing for returning/ retiring missionaries from their field of service so they can “finish well”. The housing is designed to be affordable with a generational perspective. They also would like to honor and incorporate the missionaries as Adjunct Professors at the college located on the JAMA Campus (Fall 2024).

Here is the website: https://www.missiongrove.org/

But our discussion is not just what Christopher and JAMA are doing. This is a “what if” discussion for exploring the possibilities of an alternative way of financing housing, building collaborative community, thinking with a multigenerational perspective in mind.

Here is a related article about community housing with some food for thought:

https://nextcity.org/daily/entry/real-estate-co-op-is-looking-for-investors-who-want-to-put-community-first

Discussion: Divorce Mammon

Economic Slavery – Part 2

That same night the Lord said to Gideon, “Take the second bull from your father’s herd, the one seven years old. Tear down your father’s altar to Baal and cut down the Asherah pole beside it. Then build a proper kind of altar to the Lord your God on the top of this height. Using the wood of the Asherah pole that you cut down, offer the second bull as a burnt offering.

Judges 6:25-26

Emancipation from economic slavery :

1. Come out of Babylon / Exodus from Egypt
(what is spiritual Babylon? Egypt?)

2. Divorce Baal / Divorce Mammon
(what does this mean?)


Do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Can any one of you by worrying add a single hour to your life? “And why do you worry about clothes? See how the flowers of the field grow. They do not labor or spin. Yet I tell you that not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you—you of little faith? So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the pagans run after all these things, and your heavenly Father knows that you need them. But seek first his kingdom and his righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.

Matt 6:25-34

Here is a vow before God…

…to trust him at his word – That he is provider Matt 6:33 and as part of “be the lender, not the borrower”, Deut 28:12. This vow can help you come out of being a slave in “Egypt”, to come out of “Babylon” – i.e., the ways of this world when it comes to money and economic provision:

a. Commit to “no more debt”

(commitment to no new bank debt and avoid refinancing to ‘solve’ financial problems (i.e., cash-out refi) on homes, cars, credit cards, etc. There is no such thing as “good” financial institution debt – recognize it is highly likely no one will or can help you if you have trouble repaying and therefore be prepared to be sued, repo’ed and/or foreclosed. Make a sincere commitment to exit financial institution debt before God.

b. Don’t ask man for help/money

I’ve never seen the righteous’ children beg bread”

Psalm 37:25

c. Ask God
(through prayer for Him to provide, including miracles)

d. Don’t try to solve the problem in your own strength
(I’ll be a slave until I earn my way out)

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

Matthew 6:24

Discussion: Economic Slavery

What is economic slavery?

How does economic slavery relate to almost all forms of slavery?

Truly, truly, I say to you, everyone who commits sin is a slave to sin

John 8:34

Knowing this, that our old man was crucified with Him, that the body of sin might be done away with, that we should no longer be slaves of sin

Romans 6:6

Recently, I heard the phrase “NE Center for the Abolition of Poverty” when praying about the “Storehouse” concept for the New England region.

I find it interesting that it ties the word “Abolition” and “Poverty” (Poverty is a consequence of economic slavery).

God actually tells us that the curse of poverty come on us if we serve idols:

A stingy man hastens after wealth and does not know that poverty will come upon him

Proverbs 28:22

Am I a Slave (click link)?

Mammon is a modern day idol. When we obey its voice, either in fear of money for lack of future provision, or in greed for money to take care of ourselves and our family, it is sin towards God. Yet, many Americans, and even many Christians have become slaves to Mammon – as it is a strong part of our culture – whether realizing it or not.

This is why Jesus taught so strongly against Mammon (desire of money):

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money

Matthew 6:24

I’m not sure I can imagine stronger words than despising the voice of money? Do we truly despise the influence of money in our lives?

This is serious stuff. Jesus is seemingly saying here no dabbling around with maybe that the influences of money are ok? Maybe a little bit of caring for money is alright. No. This is a black and white issue with Jesus. Why? Because money can be a very corrupting influence if we are not vigilantly despising its influences.

If you have time, listen to this outstanding teaching by Raymond Mooi from Malaysia (word about money idolatry for USA):

Mammon and the Midianites Part 1

Mammon and the Midianites Part 2

How does the Fair Isaac Corporation or FICO score system work in practice, and how does it keep us enslaved to debt?

So if my behavior contradicts my desires to do good, I must conclude that it’s not my true identity doing it, but the unwelcome intruder of sin hindering me from being who I really am.”

Romans 7:20