mathematically perfected economy™ (MPE™)    1  :   the singular integral solution of  1) inflation and deflation,  2) systemic manipulation of the cost or value of money or property, and  3) inherent, artificial multiplication of debt into terminal systemic failure;    2  :  every prospective debtor's right to issue legitimate promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them;    3  :  our right to certify, to enforce, and to monetize industry and commerce by this one sustaining and truly economic process.

MORPHALLAXIS, January 14, 1979.

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What should concern us is who stands in the way of solution, and why.

mike montagne


This article responds to Larry Larkin’s truly excellent questions in our PFMPE™ Forum. Larry writes in regard to mathematically perfected currency™:

I am still unsure as to whether some gold and silver coins are detrimental in some way to the application of the MPE™, or if it is merely an inconvenience [to issue them]. If it is simply an inconvenience [to issue or coexist with gold or silver coinage], then I request you revisit the issue.

Larry, asking from the disciplined mind of an engineer, regularly focuses relevant discussions on their potential faults or shortcomings, and on the matters which count. You can view or participate in this thread at:



Excellent question (as always).

Let’s go over it a different way, and further endeavor to resolve the bounds of the future of gold holdings, should we transition to mathematically perfected economy™. These are the finer points of the several related issues:

Those coins are not at all impermissible items of trade, for they would be things of value themselves; but they are not mathematically perfected currency™; and, by nature, they cannot and would not serve the same objectives/purposes, or be issued on the same principles.

That does not mean they cannot coexist; in fact they can.

But we would be in error to think they could serve all the purposes of mathematically perfected currency™, or even that the value of the coins should be perceived in some permanent way in terms of value as to introduce any factor of stability whatever; and our misunderstandings on these counts (forgetting the limitations and faults of a gold standard) paves the way for forfeiting principles which are vital to sustaining all the industry we are capable of. Particularly then, the intellectual and further danger is that those misunderstandings pave a way of potentially reverting to some at least of the very faults which we now suffer. All they give you on the other hand is an expensive token of value, which in fact itself is not stable.

To this latter fault/fact then, I would insist the denomination of the coin not be defined in units of currency, but instead in units of weight and purity/substance. But none of this in then end, is altogether adverse to the holder of gold:

In other words, by nature, the implementation of a currency altogether derives from an immutable obligation to deliver value, the instantiation and whole need of which serves cases where a) for one reason or another there is insufficient circulation (which cases involve potentially [and probably] vast volumes of circulation which no substance such as gold can sustain); and where therefore, b) a person or persons thus assumes an obligation to pay for some further production or equity.

What mathematically perfected economy™ accomplishes therefore, in effect (in regard to the relevant senses), is c) in restoring to the individual or such persons collectively, their right to issue their promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them… is mathematically perfected currency™ d) alleviates any need to “borrow” effectively from others (such as a central bank, or any other such “lending” entity); which in turn means e) there is never any shortage of money f) to sustain industry and g) to give the entire circulation permanent value from the point of its introduction onward, by virtue of the perpetual 1:1:1 relationship between the remaining circulation, remaining obligation, and remaining value of *all* represented property maintained by the obligatory schedule of payment of mathematically perfected economy™.

Gold, or any such relatively finite substance cannot accomplish these objectives, because the finite volume precludes maintaining the perpetual 1:1:1 relationship.

But of course, gold has value, and you can make it into a coin. Because this is a raw resource/material of relatively finite/limited supply and potentially vast demand, what you’re doing when you make it into a coin however is 1) you’re fixing its value if you do so in the conventional sense, even while 2) the demand *or other needs for it* may rise or fall; and 3) this itself cannot and should not imply consistency, or suggest (without qualification) 4) that we fix some ostensible value in terms of nominal units of currency to the coin. It *is represented* rightly in other words (and according to the intents of its holder), only by declaring its weight and substance.

All this then is actually the desire of most people who *want* to see gold coin issued. They do not want a preconceived value to be imposed upon it; in fact that itself conflicts with the “free market” principle they usually advocate in conjunction with gold. The two are mutually exclusive: that is, i) to pretend we can attach a fixed value to gold when its costs of acquisition/harvesting, demand, and advent of more important uses are further factors which will compete for gold (and even dictate better purposes for it, than very expensive coin)… all these things are in fact adverse to the other, usually desired purpose, ii) that gold coin realize its full potential value.

To be clear, I do not advocate the latter in the exploitative sense. In my opinion, the value of the resource should generally be determined by the cost of harvesting it (which of course may rise and fall itself, with a general tendency to rise, because of scarcity and difficulty of harvesting [as opposed to artificial appreciation or escalation of cost]).

In the end then, we don’t really accomplish anything with gold coin, especially if we remember to recognize the fact its actual costs naturally vacillate, and most probably, due to scarcity and ever more difficult harvesting… usually to the upside. Recognizing the very principles which most holders of gold are interested in then, serves the holder by preserving that value not by abstract/artificial restriction to a pre-conceived value, but by expressing the gold as what it is — so many ounces of such and such purity of substance (or so many ounces of gold in the resultant substance). This is the expression which actually preserves the value of the gold to its holder; and we can so evaluate how this value is affected further by the artificial failure of the present currency and further factors, as opposed to those same factors under mathematically perfected economy™ and its currency:

When or if you occupy all this gold unnecessarily as coin, you furthermore deprive the real markets and usages for gold of the supply they require, which further obfuscates cost if exploitation is involved (demand is leveraged into artificially high prices).

Remembering all this; and deciding to rid ourselves of exploitation (unearned profit in addition to the exploitation of a currency which can only multiply debt into collapse), we suffer no adverse effects of gold coin whatever.

But this is to observe then that the value or actual cost of that coin in one day is greater usually than so many days before, owing at least to the natural tendency for costs of extraction to be greater.

There should be no such thing then as a $20 coin; there can only right be an X oz, Y purity coin, of value rightly determined at any moment generally by the costs of harvesting. Further cost or purported value cannot be exalted to our advantage any moreso than it would be to our actual advantage that someone buy all the lumber produced or all the rice or corn produced, to exploit availability for unearned profit by their control of availability.

As an ostensible/purported form of money then, gold involves the extreme disadvantage of comprising an extremely expensive currency, with no benefit whatever; and with its greatest and most practical value being its natural value instead. Its value even on that plateau however is not stable, never has been, and never should be; and this is not even the desire of anyone usually holding gold, for if it were, their desire can only be preserved in mathematically perfected currency™.

But, observing these principles, can we circulate gold coin of a given weight and purity?

Surely. Absolutely. And with no damage but that such a circulation deprives us of other desirable and effective usages (which injury may be substantial).

After all, it is only in observing these principles that gold finds its natural value; and these principles alone therefore preserve the value of gold which rightly reward its holders.

The unfortunate thing then would be for its holders, wanting only the most they can possibly get (versus to preserve their wealth), to oppose actual solution of all the issues, only to hold out on their aspiration at our cost. They may and probably will on the other hand lose out if they pursue that goal without embracing the consequences, because a broken economy can hardly afford gold.

What is the natural and desirable value of gold?

We can probably estimate where the value of gold should go in today’s “dollar” (perception of the falsified dollar, the units of which we yet are subject to in the sense that they represent the parts of all cost which are dedicated to the value/cost of our production as distinct from whatever else is dedicated to serving artificial debt.

I happen to live in an area with substantial active or potentially active gold mining, sales of claims, and so forth. Much of all this is relatively dormant because of course the overall costs of mining don’t justify the rewards. With the upward trends and projections, there was a substantial resumption of mining activity until fuel prices hit their recent peak. This can be said or thought at least to indicate where the price of gold justifies its “production” (harvesting).

On its basic terms of justifying costs of production then, I would expect the *actual value* of gold to hold in the relative senses which are important to its holders at present, except that “if” the economy crashes, its value will probably actually fall, and maybe quite significantly, because you can’t eat gold, and because it sustains little vital industry.

It is ironic that gold holders are so often against rectifying the economy then (if the latter projections hold), as I would think they would realize on the other hand that yes, while gold may, during the initial parts of the fall, hold or increase its relative value against the escalating devaluation of the dollar, still, should we allow that escalating devaluation under multiplication of debt flower into full fledged collapse, gold will have little leverage to claim any stake in sustenance.

Of course, I don’t offer these ideas as opinions, but as projections of the very same principles that many gold buffs are counting on. I only project from those same facts that investment in gold will only work to the advantage of its holders against the falling dollar, until the back of the system is utterly broken. We’re getting pretty close to that now.

So what would I project on the other hand if the system is rescued by relatively immediate transition to mathematically perfected economy™?

This in fact is where I see the holder of gold to come out the best. Maintaining the current price, against reduction of all other costs seems to me to be the greatest coup possible for the gold bug.

In other words, I see our only way out to be the prices of our homes for instance falling to costs of production, from which are eradicated all along the line of harvesting resources and rendering them into production, all the costs of interest and artificial multiplication of debt. This of course not only eliminates the cost of interest on the principal loan for the home (for instance), it eliminates all such upstream costs as well, reducing the potential costs of homes to indeed our costs of production (work); and, in turn, making the wages of our work far more valuable insofar as how far they go.

Suppose then that the value of gold is sustained because miners determine to mine on the wage they can take, which is what remains after costs of operation/extraction are subtracted from the present value/price of gold? So let’s take this to be roughly $1,000/oz as further developing circumstances may soon determined.

At present then, an oz of gold pays perhaps a month or just more against a $100,000 home. If the costs of homes escalate by temporarily and artificially rescuing “the housing market,” the value of gold falls, and potentially dramatically, even ostensibly “holding” its current “price” (actual falling relative value).

If on the other hand we transitioned to mathematically perfected economy™ at some near term point, that $1,000 oz of gold pays for a full year of the same home ? something perhaps 10x what it does now.

So the greatest realization of the desires of the gold bug too are most plausible of course in the realization of mathematically perfected economy™.

This probability of greatest benefit again is just the potential or probable math, based on the bounds of where either direction are bound to go. In my opinion, weighing the plausibilities of the two potential courses, everything possible points to *by far* the greatest possible and probable advantage to the holder of gold to be realized by immediate adoption of mathematically perfected economy™.

Persistence in the present, imposed system (subject to further corruption/manipulation of “the value” of gold), has little potential upscale. If for instance, the dreams of the gold bug are realized in $2,000/oz prices, we see the near term potential doubled. Even not seeing that *potential* upside under the present system, the value of gold is immediately multiplied 10 fold. If the upside under present conditions is realized/manifested under mathematically perfected economy™ on the further hand, you see a 20 fold relative improvement in your investment.

So those are the basic bounds of how I see all this shaking out for the gold bug.


“To find the players in all the corruption of the world, ‘Follow the money.’ To find the captains of world corruption, follow the money all the way.”

mike montagne — founder, PEOPLE For Mathematically Perfected Economy™, author/engineer of mathematically perfected economy™ (1979)

© COPYRIGHT 2008, by mike montagne and PEOPLE For Mathematically Perfected Economy™.

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mike montagne — PEOPLE For Mathematically Perfected Economy™.

"To find the players in all the corruption of the world, 'Follow the money.' To find the captains of world corruption, follow the money all the way."

mike montagne — PEOPLE For Mathematically Perfected Economy™

While 12,000 homes a day continue to go into foreclosure, mathematically perfected economy™ would re-finance a $100,000 home with a hundred-year lifespan at the overall rate of $1,000 per year or $83.33 per month. Without costing us anything, we would immediately become as much as 12 times as liquid on present revenue. Transitioning to MPE™ would apply all payments already made against existent debt toward principal. Many of us would be debt free. There would be no housing crisis, no credit crisis. Unlimited funding would immediately be available to sustain all the industry we are capable of.

There is no other solution. Regulation can only temper an inherently terminal process.

If you are not promoting mathematically perfected economy™, then you condemn us to monetary failure.

© COPYRIGHT 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED.COPYRIGHT 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED. TRADEMARKS: PEOPLE For Mathematically Perfected Economy™, Mathematically Perfected Economy™, Mathematically Perfected Currency™, MPE™, and PFMPE™ are trademarks of mike montagne and PEOPLE For Mathematically Perfected Economy™, perfecteconomy.com. ALL RIGHTS RESERVED.


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