permaculture

["Scott Pittman" <scott@permaculture.org>]

I always love it when the conversation turns to invisible structures, like
finance.

While at the IPC8 in Brazil I met a young Argentinean lawyer/economist,
Carlos Louge(?) who used the model of the recent crash of the Argentine
economy in comparison to the current position of the U.S. dollar.  In
Argentina it seems that barter and alternative currencies sprung up
spontaneously.  Bernard Letier who was once the head of the central bank of
Belgium and the architect of the Euro, is also big on alternative
currencies.  At the end of the day most of the economists that I respect are
looking at a very short time frame before the mirrors crack and the smoke
thins in the U.S. economy, 10 years seems to be the outside limit.  So my
question is how do we prepare?  Not just as individuals but as communities.
I am currently reading a great book titled "The New Golden Age: The coming
Revolution Against Corruption and Economic Chaos", by Ravi Batra, an
economist from Southern Methodist University, that puts a positive spin on
the post crash world; you've got to love an author who last book was
entitled "Greenspan's Fraud".  Bill McKibben has just written "Deep Economy"
which I hear great things about. 

Certainly institutions like the permaculture credit union should be
preparing to advise their members on when and how to withdraw their
"dollars" and put them into something a little more stable.  Stability, in
my mind, wanders to horse drawn equipment, hand tools, fertile land, and on
and on. If indeed we are on the edge of another big crash then it makes
since to me that we should be investing in survival tools.  I also know that
skills such as permaculture, and shoe making will become much more highly
marketable and prized, won't that be nice.

It also means being debt free, as Robert Waldrop remarks below, since
bankers and other lending institutions don't seem to be very emotional about
throwing you off of the land no matter what the situation.  Remember,
fortunes were made off of the misfortunes of those caught with big debt
during the great depression.

I was recently in a film on money in which this very subject was discussed
by top economists and others from around the U.S. Check out
WWW.themoneyfix.org for the release date. In the film I am using the model
of a forest system to illustrate sustainable strategies. If we, indeed, use
nature as our design guide then our resources should be stored in our own
bioregion with ever increasing connections for sharing such.

Scott Pittman
Director
Permaculture Institute
www.permaculture.org

-----Original Message-----
From: Robert Waldrop [mailto:bwaldrop@cox.net] 
Sent: Sunday, October 07, 2007 8:51 PM
To: permaculture
Subject: Re: [permaculture] A Question about investments

"Everyone" with extra cash is looking for a good 
financial investment where the gains aren't 
taxable.  But as far as I know, the only "tax 
exempt" financial investment would be in municipal 
or state bonds.  Generally, these bonds fund 
capital expenditures that I doubt most 
permaculturists would "approve of", such as big 
drainage projects, highway construction, prison 
construction, etc.  So you don't pay taxes on the 
income, but your money is used to move us further 
along the path to destruction.

If you think about this permaculturally, you can 
come up with some ideas.

My favorite "tax free investment" is a dwelling 
without a mortgage.  Suppose you live in a house 
with a $50,000 mortgage.  And then you get a 
windfall of $50,000.  I'd say the best investment 
is "paying off the house".  First, you are no 
longer paying interest so that $50,000 debt 
doesn't eventually cost you $150,000, so right 
there you have made $100,000 tax free in the form 
of "money you don't have to spend".  Second, you 
no longer have a monthly mortgage payment of 
principle and interest, and that is worth several 
hundred dollars in money you no longer have to 
spend, so that is also like a tax free investment.

Paying off a mortgage is also counter-cultural. 
When you tell people you don't have a mortgage, 
they look at you like you are insane!  "Don't you 
know your house is like a credit card?"  Or, "You 
lose the tax deduction!"  Somehow, spending say 
$600/month to get a tax deduction of $300/month, 
never quite made sense to me if you had the money 
to pay off the debt.  So, since the "conventional 
wisdom" is to stay in debt, it seems likely to me 
that the permaculture approach is to "get out of 
debt as quickly as possible".

Another good tax free investment is investing in 
energy conservation.  I am "earning" between 6 and 
7% on the amount I spent 2 years ago to 
superinsulate my house, add a passive solar 
sunspace, and a few other bells and energy 
conservation whistles --  in the form of "money I 
no longer have to pay for energy", since I reduced 
my household btu usage by 50%.  The higher the 
price for energy goes, the greater my return will 
be.  And it is an absolutely certain return that 
we get irrespective of what the financial markets 
do.

But if you want to put money in a bank and earn 
interest, a credit union is your best choice. It 
is owned by its depositors.  I don't know anything 
about the Permaculture Credit Union, but I like 
the idea.  They are not, however, local to my 
area, and I tend to support my local economy.  I 
don't have big piles of bucks to invest, but I use 
a local credit union for my monthly financial 
needs.

I agree with the comments that others have made to 
beware of sales people hawking financial 
investments.  They work on commission, and you 
cannot count on them to offer you objective and 
unbiased advice.

You could look for "socially responsible and 
environmentally aware" investment possibilities, 
there are various mutual funds that hawk these 
products.  But that remains a risky investment, 
since your principle is at risk of the vagaries of 
the stock market.

Those are my thoughts.

Bob Waldrop, Oklahoma City

----- Original Message ----- 
From: <lbsaltzman@aol.com>
To: <permaculture@lists.ibiblio.org>
Sent: Sunday, October 07, 2007 7:30 PM
Subject: Re: [permaculture] A Question about 
investments


> Be aware that most, but not all, financial 
> advisors are working on commission and make 
> their money putting you into investments that 
> they get the highest commissions from.? Caveat 
> Emptor more than applies. And then their is the 
> ethical component. There are a few financial 
> advisors interested in steering people into 
> green investments.
>
>