The Capitalistic Renaissance PDF Print E-mail
Written by Prof. Paul Douglas Katchings   
Saturday, 20 March 2010

The Capitalistic Renaissance

“Where we went wrong with debt and what the solution is”

by Prof. Paul Douglas Katchings
2010 Copyright. All Rights Reserved. March 19, 2010.


Table of Contents


1. Introduction
2. Weaknesses
3. Fundamentals
4. Productivity
5. New Economic Reality
6. The origin of the debt problem
7. The generic public corporation versus the hybrid bank corporation
8. Debt hijacking capitalism
9. What happened?
10. Generations of debt
11. Inflation’s true definition
12. The Solution
13. A Value Choice
14. Product Equity Value©
15. Equity and Wages
16. Unqualified Middlemen
17. A Numerical Example
18. The Big Picture


Capitalistic Renaissance     1: Introduction

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Today we have an economic solution to debt. The solution is so simple that it seems to have fallen just in time from the sky like manna from heaven. No one doubted we would eventually find the correct solution to this systemic debt problem that burdens countries and people.


But the impact of this solution on several perplexing economic problems is absolutely earth-shattering. One dollar spent by the consumer actually turns into $3, $5, $11, $20 or over $40 in equity value, thus solving the problems of jobs and savings. Poverty is ended at the same time.


For posterity, let us revisit and agree on the fundamentals of capitalistic economics to see where we went wrong. The discipline of this science-based solution exposes long-held economic beliefs as inadequate or unsubstantiated. Some of these beliefs have been popularly accepted for centuries.


The foundation of our debt problem came from the misunderstanding and lack of knowledge of capitalism. Debt is not part of the concept of pure capitalism, as we will see in the solution following “The origin of the debt problem” and “The generic public corporation versus the hybrid bank corporation.” Introductory sections about Weaknesses, Fundamentals, Productivity and a New Economic Reality lead up to an analysis of the problem followed by the solution.


Section 2: Weaknesses
Capitalistic Renaissance     2: Weaknesses

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Our understanding of the formula and components of capitalism was not precise. Without a keen understanding, we did not know how to harness and marry the social power of the “free market” with the vehicle of capitalism, i.e. the public company.


We did not know how to make capitalism universally accessible where all consumers are directly included in the value creation process. This absence of universal inclusion in the capitalistic process is exactly where we went wrong in the past. Our reliance on credit by a hybrid of capitalism to drive consumer demand took us off course, bringing us face to face with the biggest economic problem of our time: the exponential increase in debt.


Imprecise information put us at a disadvantage. For instance, we do not have an accurate way to measure a country’s overall economic output, i.e. Gross Domestic Product (GDP). Professional economists have been debating how the GDP should be measured. But they have missed the bigger question of how the market value of public companies can address the debt issue if this combined market value is bigger than GDP.


Until now, we did not have a single economic study that highlights the market value of public companies as an economic structural solution to debt. The combined market value of the 18,600 public companies in the U.S. is $19.95 trillion (CIA Fact Book) – about $6 trillion more than the U.S. gross domestic product for 2009.


Only 23 of the 266 entities or countries tracked by the CIA Fact Book can emulate the free market of the U.S. where the combined capitalization (or market value) of public companies is greater than the sum of the national GDP and the combined value of private businesses. The sustainability of this market value is put into question because of the debt problem and our imprecise understanding of true capitalism.


Even in a weaker market environment, $19.95 trillion in market value created by U.S. public companies is huge. When pure capitalism is understood for the first time, the doubling or tripling of this market value is the logical consequence. The all-inclusive nature of pure capitalism provides the consumers with continuous purchasing power, thus generating more value.


We have paid a heavy price – a multi-trillion dollar debt – for glossing over the unique ability of public companies to create multiple values. The significance of this value creation is lost in the maze of inadequate methods used to determine GDP or increase consumer spending without debt.


This oversight is nothing short of intellectual ineptitude on the part of professional economists.

The focus on job creation is necessary. The U.S. economy’s 29.6 million private businesses and 18,600 public companies both create jobs. It does not really matter which type of business creates more jobs. What matters is that job creation barely alleviates the debt problem whose solution is automatic when we know how the public company’s equity value is created and used correctly.


The biggest weakness in current economic thought is that the jobs created do not and cannot produce enough wages to pay and balance the exponential increase in debt. Talking about job creation cannot produce real prosperity for the average person unless the public company is included in the mix.


Go to Section 3: Fundamentals
Capitalistic Renaissance     3: Fundamentals

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Capitalism is based on the public corporation harnessing the future value of cash for present use. From the shareholder’s point of view, shares are acquired today because the value of the shares may increase tomorrow. There are no guarantees, hence the risk. The financial value of the shares is called “equity.” Public corporations exist to create equity for shareholders.


There is nothing wrong with this view and the acquisition of shares. The structure of the corporation is legally divided into equal “capital” pieces of itself, i.e. “risk shares.” Appreciation of share value is not guaranteed. Only an astute few are able to harness the “hidden equity value” to their advantage – their reward for taking a risk. But the economic crisis has increased the risks and reduced the rewards for all – a threat to the status quo.


The venture capital industry, for instance, is bloated with billions of dollars but lacks the fundamental understanding of capitalism to find any worthwhile investments to make. This is why venture capital that used to fund ideas without guaranteeing the customers in their funding model is now sick and broken.


Now we can have direct universal consumer inclusion into pure capitalism. This inclusion is vital for capturing this “hidden equity value” so that everyone can benefit from guaranteed share prices and lower risk. Thanks to advances in communications technology and accounting reporting, we can deliver this all-inclusive property of pure capitalism to consumers.


What was not known until this study was exactly how and why the public companies can create so much equity! The creation of equity is like the transformation of a small seed into a gigantic tree laden with fruits. Prior to this study, any tree analogy used to describe equity creation could not have been much more than a tree stump with a glimmer of life.


Go to Section 4: Productivity
Capitalistic Renaissance     4: Productivity

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Another analogy is the chain reaction that generates the power inside a nuclear reactor. With one unit of input, the public company can actually produce more power and value than a nuclear power plant (whose output cannot be greater than the input per current energy laws). Unfortunately this chain reaction was derailed for the consumers by government interference and a lack of capitalistic knowledge on the part of public company managers.


Now we can look at the mechanics of economic growth from a fresh consumer perspective and understand how the tree of pure capitalism becomes fruitful. By the formation and correct use of public companies, we can harness the nuclear chain reaction of equity value creation for every consumer. The needs of the many and the needs of the few are met simultaneously without any need for worthless “trickle-down” theories.


The mechanics of running a public company are broken down into four factors of economic production. Economists and corporate managers do not yet understand the power and simplicity of this four-fold economic concept.


It is not a matter of academically stating what the four factors of production are. They must be mastered for their scientific reconciliation with other sciences, particularly with the four states of matter in Physics. Economics does not exist in isolation from scientific reality no matter how hard the science may be.


The four factors of production – entrepreneurship, labor, capital and land – are like the four cylinders of an engine. Think of the public company as an engine that creates multiple values of $3, $5, $11, $20 or over $40 in equity from a single dollar of input.

When any one of these factors is not accounted for, the effect is like running the engine of the public company on three cylinders instead of four. The optimized capacity to produce equity value is reduced.


Budget planning, which is a function of these four factors, suffers. Organization is also a function of these four factors. Companies are inefficiently managed because their organizational designs do not reflect these four production factors. The engine is still running on two or three of the four cylinders – far below full potential.


Go to Section 5: New Economic Reality
Capitalistic Renaissance     5: New Economic Reality

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Shareholder value is maximized with the optimized power from universal equity value distribution – a key principle of pure capitalism. Equity will do what jobs cannot do because the engine of the public company is running on all four cylinders. We meet the financial needs of all consumers when we give the public company the recognition it deserves in the reality of capitalistic economics.


When the formula for capitalism and the factors of production are applied to public companies, then these companies are able to get 3, 5, 11, 20 or over 40 times more output from one unit of input. This precise application of capitalism turns our globe into a virtual Garden of Eden by ending debt and poverty instantly.


Every country that has public companies is practicing capitalism to the degree that they understand the use of the public corporation as a power plant and as the primary measurer of a country’s gross domestic product.


Adam Smith is given credit as the father of capitalism. But he did not use the word “capitalism” in his Wealth of Nations. He did not attribute budget and organization efficiency to the four factors of production.


Nevertheless, he used the word “liberty” which has influenced all “free market” economic thought. “Self-interest survival” is a modern-day interpretation of Adam Smith’s “liberty” especially in a time of economic crisis.


By definition and common sense, Liberty and Self-Interest Survival must include everyone in the creation of value by restoring the engine of the public company to full capacity for the maximum creation of equity for everyone. The balanced replacement of free credit with free equity is where our solution to the debt problem begins and ends.


Go to Section 6: The Origin of the Debt Problem
Capitalistic Renaissance     6: The origin of the debt problem


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We need to rethink the notion of jobs, credit, interest and finance for a modern capitalistic economy if we are to solve the debt problem. Our exploration into the origin of this problem will help us balance our perception of jobs, credit, interest and finance with an awareness of equity.


This balance of perception is essential, helping us understand why the financial concepts of unlimited credit and interest are the cause of debt as a function of a limited job. We feel the financial pressure of debt. It’s time for us to understand what’s going on.


The discipline of finance uses mathematical methods to measure various relationships between credit, interest and debt. Financial engineering develops debt instruments such as mortgages, bonds, credit cards and derivatives for consumers, private businesses, public companies and governments to use.


Banks are the primary deliverers of these deadly debt instruments to their customers. These instruments are flawed in their design because they hide the silent unbalanced consequence of debt to an unsuspecting public.


Credit causes financial heart attacks when the repayment of the interest on a credit card or loan first causes the debt to rise faster in a fixed structure than the consumer’s income.


A financial heart cannot effectively pump the lifeblood of cash-flow through arteries whose inner surfaces are littered with the debris of interest. When the arteries get clogged up because of unbalanced (financial) living, it’s only a matter of time before a (financial) heart attack happens.


To further understand the origin of debt, we need to understand the role of the public company as the vehicle of capitalism. The public company uses raw materials to produce equity for itself and its shareholders. The operative words of capitalism are the public corporation and equity.


Debt is really not part of the structure of true capitalism. After looking at the fundamentals of the generic public corporation, we will understand why debt is not part of capitalism.


Go to Section 7: Generic Public Corporation vs. Hybrid Bank Corporation


 Capitalistic Renaissance     7: The generic public corp. versus the hybrid bank corp.

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A distinction must be made between the generic public corporation and the hybrid bank public corporation. They both create equity from raw materials. They both use raw materials to make products or services that bring in revenue. Their profits after all expenses drive their share prices, thus creating equity. But there is an important difference in how they create equity.


We can use the generic manufacturing process to make tangible things that are sold for cash. The excess cash earnings from the sale of tangible things are the dividends that drive share prices. This is how the generic public corporation creates equity.


For “hybrid banks” we can use their euphemistic services for a fee, normally paid in installments over a period of time. For instance, we accept and use free credit from bank corporations in return for a stream of small payments over time. Our payments are revenue to the banks. As in the generic example, this revenue eventually drives the share prices of the banks, thus creating equity for bank shareholders.


Both types of equity-creating processes use the fundamental tool of capitalism, which is the public company. Profits in both types drive share prices to create equity. Now here is the distinction that is crucial in understanding the origin of our debt problem:


  1. The generic public corporations acquire limited “physical” raw materials to make things that are purchased by consumers.

  2. The hybrid bank public corporations use unlimited free “credit” as raw material to produce “debt” whenever consumers purchase things.

People generally know where the physical raw materials come from. These tangible materials can be seen or touched. Most people appreciate the limits of physical raw materials. But there is a different perception of credit. Consumers and banks believe there is a never-ending supply of free credit as money. Free credit feels like free money, until it’s time to start paying it back or until personal earnings are impacted by a crisis.


When consumers are given free credit by hybrid bank public corporations to buy things, the consumers are actually purchasing debt. This state of affairs is a type of dis-ease or imbalance.

Currently there is no balance between the generic public corporation constrained by physical raw materials in producing things to create equity, and the hybrid bank corporation with unconstrained credit-creation that produces debt.


Go to Section 8: Debt hijacking capitalism


Capitalistic Renaissance     8: Debt hijacking capitalism

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Left without balance, the hybrid bank corporations are hijacking capitalism with unprecedented debt. This debt is threatening the very foundation of economics.


Normally when consumers are purchasing things from generic public corporations i.e. cars, shoes, gold, food, etcetera, the things purchased can go up or down in value for the consumers. This fluctuation in value depends on the supply of the raw physical materials.


When consumers are acquiring debt disguised as free credit from banks, the interest on the credit always decreases the value to consumers and eventually surpasses their fixed incomes. This happens because the interest increases the size of the debt with the biggest increases taking effect when the earliest or first payments are made.


Today many people and countries face this problem where the debt servicing or the ability to repay the debt as a percentage of income is greater than one hundred percent. In simpler terms, many people and countries owe more than they earn.


In most cases the suppressive effects of increasing debt on fixed incomes are known in advance, but are masked by greed and not the enlightened driving force of pure capitalism as a social good.


Go to Section 9: What happened?
Capitalistic Renaissance     9: What happened?

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Here is where we went wrong in relying primarily on debt by governments and consumers to drive demand. We did not recognize the long-term debt consequences of hybrid public corporations using their unlimited ability to create equity by granting free credit to consumers on fixed labor income.


This paper has frequently used the term “hybrid” in its analysis of the debt problem. The reader may be wondering why banks are described as “hybrid” public corporations. The reason for using the word “hybrid” is easier to digest within a historical context.


Banks as hybrid public companies have two licenses to operate in creating equity. Their first license is the license to operate as a generic corporation. Their second license is a special license granted by the government to integrate the banks into an economic system where the government insures the deposits of bank customers. Key elements of this system have been in place since the 1930s at the urging of Lord Keynes.


The integration of banking into the fabric of our economic society, ostensibly as a social good with its unlimited ability to create credit-debt, has masked the cause of exponential debt creation that started slow and is now out of balanced control.


Go to Section 10: Generations of debt


Capitalistic Renaissance     10: Generations of debt

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It is unlikely that John Maynard Keynes could have foreseen the implications of interest at a time when western economies needed a jumpstart from the Great Depression. He laid the foundations of modern macroeconomics with The General Theory of Employment, Interest and Money (1936).


The crack in this foundation comes from the word “Interest” in his work. If he did foresee this debt problem, his convenient answer at the time was that “we [he and others who contributed to this debt problem] would be long dead.”


The crack has slowly widened with the passage of time and stronger communication ties between national economies. Unbridled debt has a generational effect on any country.


Interest is the toxic problem in the unbalanced General Theory of Keynes, a theory that is no longer needed. Yet there was some good in his work. The primary reform of the New Deal for social security has always produced equity surpluses from the social security fund investing in public companies. The surplus did not come from Lord Keynes or the government. It is capitalism that produced the surplus of social security.


Fractional reserve banking, a type of derivative, is the origin of free credit that produces the debt bought by the consumers as credit. In a “smoke and mirrors” twist of fate, the consumers provided the raw material from their checking and savings deposits that created the unlimited free credit – the same credit used by consumers, aka wage earners or labor units. Using this credit is exactly the same as purchasing debt.


Government-sanctioned deductibility of interest from the taxes of wage earners has provided another masking layer over this debt problem of free credit with interest attached.


A myriad of interest formulas used by banks cause debt to increase faster than the ability of wage earners to pay the taxes and pay back the exponential increase in debt. Fixed employment contracts are simply not enough.


Go to Section 11; Inflation’s true definition


Capitalistic Renaissance     11: Inflation’s true definition

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The inability of wage earners to increase their labor price in tandem with price increases in the general economy is the true definition of inflation. Too much money chasing too few goods is a naïve view of inflation, another indication of the general misunderstanding of the debt problem and true capitalism.


A secondary point where we went wrong was in not relying on the use of equity from the generic public corporation as a social good. The pure goal of capitalism via its vehicle – the public company – is the self-interested creation of equity by any legal means. The combination of self-interest survival and all-inclusive capitalism brings to wage earners more wealth and more options to neutralize inflation.


The means to produce equity does not define capitalism. There is no harm done in repeating this subtle point. Credit (and its consequent debt) is not part of the pure concept of capitalism. The production of a car, oil extraction, the mining of gold, tree-cutting, etcetera are also not part of the concept of capitalism.


Until these production concepts are placed into the vehicle of a public corporation where consumers purchase the end products, the concept and power of capitalism cannot be used. It doesn’t matter what the end product is – a car or debt.


The only concept that defines capitalism is the creation of equity value for the shareholders. We have identified the root causes of the economic problem of “credit-debt” and therefore the solution of “equity-value” without disturbing the status quo.


Go to Section 12; The Solution


Capitalistic Renaissance     12: The Solution

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Here is the simple economic solution to debt: tie the labor units automatically into the value creation process caused by new public companies. The new financial tool for consumers, wage earners or labor units is the “free customer stock option.”


Let’s understand and contrast what is being said here. Currently consumers are tied to free credit where the repayment of the exponential debt taken on by governments and consumers is via limited or fixed cash wages. The continued use of free credit where the consumers are really purchasing debt is flawed and unnecessary.


We now know that when 46% of the ownership of new public companies is given free to consumers in exchange for their cash purchases, the value of their stock on the first trading day is always 3, 5, 11, 20 or over 40 times more than their cash purchases. This automatic grant of equity value to consumers is a strong incentive for them to spend their hard-earned cash, hence the repeated claims of “guaranteed sales” or “guaranteed customers” in this article. It is a reasonably sober and probable claim to make.


The solution calls for an exact number of customers to be given 46% ownership in an exact number of new public companies in exchange for their guaranteed cash purchases. This enables consumers to capture and participate in the “equity value” that they create.


From the consumer’s point of view, the solution replaces credit with equity. From a macro-economic point of view, the solution brings an economically healthy balance between credit and equity.


Go to Section 13; A Value Choice


Capitalistic Renaissance     13: A value choice

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The Capitalistic Renaissance calls for new public companies to make a value choice – a choice between greed and sharing – in the design stage of their ownership structures.


The first option based on greed is to keep the majority of the ownership and have less guaranteed revenue and therefore less capitalization. The second option is to share the ownership with the customers and have guaranteed sales and therefore more capitalization.


In other words, the founders or principals of new public companies have a choice to make. Their first option is to keep more ownership and get less equity value from selling products and services to the few. Their second option is to keep less ownership and get more equity value by selling their products and services to the many.


When consumers use credit to purchase the widgets from old public companies, they enjoy the utility value of the widget but suffer the consequences of debt caused by their credit purchase. This free-credit-generated debt that has to be paid back is now replaced with “free equity” from new public companies. Debt payments come out of the consumer’s pocket. Equity is put into the consumer’s pocket.


Go to Section 14: Product Equity Value©


Capitalistic Renaissance     14: Product Equity Value©

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The ubiquitous solution to debt is called Product Equity Value© or “PEV” because all sales by a public company cause the creation of equity that can only be attributed to the purchasing activity of consumers. It is the individual self-interest of utility and PEV for the consumers that replaces credit-debt with equity-value.


Consumers receive two values: the utility value of the product and the Product Equity Value© inherent in the product in the form of what appears to be free shares. The shares are actually not free because the consumer’s cash purchases cause a chain of events showing up as earnings, rates of return, and dividends that drive share prices.


Membership in the social network at† is available to anyone interested in discussing the debt problem and the solution. This forum welcomes the exchange of ideas and the proactivity of anyone seeking to play a role in the solution. The debt problem is so serious that an academic attitude to the solution is not enough. With understanding comes responsibility.


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Go to Section 15: Equity and Wages


Capitalistic Renaissance     15: Equity and Wages

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For a majority of consumers using Product Equity Value©, the tradable equity value given for their cash purchases is instantly greater than the wages they receive for their labor. This observation is significant and is in contrast to free credit causing debt that can increase faster than wages.


There is no free lunch or violation of economic beliefs now supported by the facts. Increases in the stock prices of manufacturing public companies and banks are always greater than the labor cost of wage earners or consumers. This economic observation of equity values being greater than the earned wages is basically unselfish.


If the integration of dual-licensed hybrid banks into the economy is the direct cause of printed currency inflation in the form of unconstrained free credit creation that causes exponential debt, then why not integrate consumers into the equity creation process of new public companies with a certain percentage of free ownership so that the consumers do not rely on credit that creates debt?


When consumers are permitted to receive a certain percentage of public company ownership in exchange for purchasing, they are able to insulate themselves from inflation. Then inflation and debt becomes the paper tigers that they really are.


Product Equity Value© addresses the economic issue of elusive savings for the consumer. When consumers purchase from new public companies, the Product Equity Value© is always greater than their purchases, thus adding to their savings. With PEV the consumer’s savings is increasing while the consumer is spending. Without PEV the consumer is trapped in a credit-induced debt cycle that builds up quickly, resulting in debt exceeding wages


When we take the emotions out of economics and replace these emotions with balanced science, we have positive equity driving economic demand in a new way. The more consumers shop the greater their direct savings without being filtered through middlemen.


Go to Section 16: Unqualified Middlemen

Capitalistic Renaissance     16: Unqualified middlemen


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Citizens do not normally see that some elected politicians are middlemen of various stripes having the same narrow self-interest of promoting their own welfare. It is these unqualified middlepersons who create new codes in economic law, infiltrating consumer wages with the “silent interest” of taxes and fees. Economic law is not natural law. Economic law is man-made.


Man-made law should aid natural law. It should stimulate commerce and economic exchanges rather than place citizens regardless of race into an economic slavery more insidious that a Mississippi plantation.


With Keynesian economics the consumers are slaves to credit and middlemen governments who make economic and financial decisions for the consumers. The more consumers use credit and rely on middlemen to make their investment decisions for them, the more indebted they become.

The more consumers use PEV©, the greater their direct automatic individual savings. In PEV© economics, consumers are liberated by the equity of “pure all inclusive capitalism” and Adam Smith’s “liberty.”


We now have the formula that is more ”efficient in creating automatic equity value and savings for consumers each time they shop.”  This reality in economic terms is called a “new consumption function” where “consumption is now a function of Product Equity Value©.”  This function shows the automatic increases in equity value each time a consumer purchases from new public companies.


Go to Section 17: A Numerical Example


Capitalistic Renaissance     17: A numerical example

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The phrase “free customer stock options” may sound too new or foreign. If this is so, then consider the precedent of “free employee stock options” which are granted to a critical number of employees for their invaluable job performance. Note that employee stock options given to a few employees cannot and have not guaranteed sales by public companies. PEV© economics and free customer stock options will guarantee many more sales.


We can financially engineer value for the consumers by finding the optimized relationship between the number of consumers and the number of new public companies. We allocate free shares to consumers so that the equity value to the consumers on the first trading day is greater than their cash purchases.


There is only one Value Creation Formula© (VCF©) for engineering value for public companies. This formula is x=(a*b/y)/c where X is stock price, A is revenue, B is percentage of revenue for earnings, Y is shares outstanding and C is the rate of return that creates equity for the public companies. An optimized value creation system of 14 million customers for 364 new public companies is coming into existence at† using this formula.


Take as an example, a new public company optimized to sell 14 million widgets. The company’s widgets are annually-priced at $33 with upgrades, services, etc delivered via the internet. Then A is 14 million times $33, B is (+ or -) 63%, Y is 61 million and C is (+ or -) 3%. With these numbers, the Value Creation Formula© calculates a stock price of $159.05.


It is the control and changes in the B & C variables that cause the multiples of 3, 5, 11, 20 or over 40 times equity value to be created.


Keep in mind that the A variable annual revenue is predictable with PEV economics whereas today, the revenues of the public companies are basically guess work.


Let’s look at the financial impact to any one of the 14 million consumers. With 46% of outstanding shares (61 million) allocated to 14 million consumers, each consumer owns 2 shares. For spending $33, any one of these consumers receives 2 shares worth $318.10 (or $159.05 * 2). The multiple in this example is 9.64 because $318.10 divided by $33 equals 9.64.


14 million consumers are pre-assembled via the internet into an optimized system where they wait for one of 364 new public company shares to be registered. In a matter of months, 14 million to 154 million Americans can be free of debt.


Then each one of the 364 new public companies comes into existence at†, 14 million customers and partners are waiting to purchase for cash in unison on the first trading day. These concentrated cash purchases cause the share price of $159.10 in this example.

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Go to Section 18: The Big Picture


Capitalistic Renaissance     18: The big picture



Let’s be absolutely clear of the simplicity and immediacy of implementing Product Equity Value© in the U.S. and globally.


The new public companies using Product Equity Value© are responding to an allocation of ownership change written into their by-laws where the customers are the new venture partners of every new public company.


Basically these new public companies are not bringing new products and services to the market place; they may bring new products and services to market and some will. New Businesses are buying from existing businesses. This is the reason for the B2B (business 2 business) and the VP (Venture Partners) in the first of several solution structures at†.


From an accounting point of view the old public companies are constrained from using Product Equity Value® by the concern of the dissolution of the ownership percentages of existing shareholders when giving free customers stock options to gain guaranteed customers.


What is clear is that 364 new pubic companies at† are buying products and services from old and non public companies with underutilized capacities. The less than 100% capacity is caused by existing companies not including the customers for the guaranteed of their sales. Therefore the speed of implementation of PEV is that the new public companies are not manufacturing and holding costly inventories.


In three simple and automatic steps the customers-partners are providing seven cents of start up cash, average purchase cash, and reaping the immediate increases in the share prices.

On average we can say that a $.07 investment + a $33 purchase price = $318.10 in PEV on the same day. The new public companies win, the older public companies win, and most important the customers win!


A consumer spending $12,000 with 364 new public companies will have instant equity value of $36,000, $60,000, $132,000, $240,000 or over $480,000. The consumer gets this value just for shopping at these new public companies that share the value created by the consumers with the consumers.


The management objective of these 364 new public companies is to optimize the earnings rate B with 14 million predictable sales to increase the stock price X. Some of these 364 new public companies will obtain share prices that are only 3 times the cash purchases. Other new public companies will achieve share prices that are 40 times the cash purchases by the consumer.


Product Equity Value© and “free customer stock options” give 14 million consumers, indeed 3.2 billion global citizens, the self-interested reason to learn about how value is created and to obtain the two values of utility and PEV© for their cash purchases.


The Capitalistic Renaissance calls for the increase in global public companies from 66,400 to 340,600 with 4,004 new public companies in the U.S.  46% owned by 154 million American labor units will cause the U.S. GDP to exceed $53 trillion!


Paul Douglas Katchings

2010 Copyright. All Rights Reserved.
March 19, 2010.

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Last Updated ( Wednesday, 18 May 2016 )
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