Reply To: Questions regarding DPF.

[Rezwan]

amcnea wrote:
What exactly is the relationship between FFS and LPP? If this is already discussed somewhere can you point me to it please?

See https://focusfusion.org/index.php/site/category/C26/ – scroll down to what is lpp and how is it related to ffs?

Now, the only problem with this that I see is that “micro-investors” or, non-accredited investors who want to chip in funds to the experiment, will get nothing back from their investment. They can only donate. So, this tends to discourage people from donating. Let the big fish be a free rider on my dime! Hah! Let them come up with the whole thing. This issue has always bugged me.

Can something be done about this? I don’t know what the law is or how this can be handled but here is a hypothetical. Could FFS collect micro-investments from registered users, and hence keep information about 1) the Micro-Investor and 2) the amount invested. FFS Could then group this money together into amounts large enough such that shares of LPP could be bought @ $50 per share. Finally FFS could have a broker whom is an “accredited investor” and can purchase the shares from LPP.

That would be illegal, because we’d be promising something that we aren’t allowed to promise. I’ve spoken with lawyers at the SEC about this. It’s just not possible. Micro investors can donate, but you can only invest if you have a lot of money. The rich get rich, the poor are patronized. Much can be done about this, unfortunately, it’s all long term stuff that won’t really affect current needs. If LPP were to go public, anyone could invest. It’s at proof-of-concept stage, though, so can’t really be taken public. But it’s now that it needs the investment money.

I think there is a space now for developing a campaign around making micro-investment, pre-public stock offering, legal. Given the track record of Wall Street, and the fact that taxpayers had to bail out the system with 700bill, we already are the micro investors that prop the whole thing up.

The thing is that science experiments are inherently risky investments. The SEC is trying to protect people from losing money. The primary goal, thus, is protecting investors, not making $ available for innovation.

I think the argument to the SEC would be somewhere along the lines of: by allowing micro investors to invest in scientific innovation, or, say, film – and limiting it to small amounts so that no one gets over-excited and loses their shirts on this – and with full disclosure and warnings that investment may not return any dividend, caveat emptor, etc., and administering this through an online system like ebay or paypal that keeps track of the investment amounts, and also allows oversight of the people receiving the money (to enable better decision-making) – you’ll have a transparent system that is primarily about getting money to people with ideas, with less focus on making money, but which may, paradoxically, end up generating a lot of quality “black swans”. In other words, we would expect that a lot of the investment opportunities in such a system would be flops, but several might succeed and become stars. We could test such a system for a while, and see if this sort of micro-investment, wisdom of crowds, no investor too small program does any better than the ponzi-scheme floating bad-loan generating wall street fat cat thing we have going on now.

We’d have to look at winners and losers in both systems overall. It would be a great social experiment.

At the very least, with the micro investors funding smaller innovators (inventors, artitsts and designers), you’d create a lot more jobs that would help diversify and enrich the local economy. Like the physicists at LPP. They get a salary. Their salary goes right back into the economy as they rent or buy a house, car, stuff for their families. Then they might invest their savings into some bonds, stocks, and back into the micro-investments of other inventors they think are cool…

It’s about circulating money and ploughing it back into the hands of innovators, creators, artists, scientists, etc… That money always gets back into the economy. Money is like electricity. Currency. The best system allows for the most efficient circulation. I don’t think the system we have now fits that bill. Interview of Matt Taibbi by Stephen Colbert:

Stephen: You say that Goldman Sachs takes advantage of bubbles that they helped create.

Matt: Wall street really used to be about helping investors find good business opportunities which in turn would create jobs. Wall street had an important part in helping stimulate the real economy. What’s happened in the last 20 years is that it’s really turned into one ponzi scheme after another, tech stocks, mortgages, commodities bubble last year. It’s turned into a purely speculative economy, it’s really basically a casino now where Wall street makes a ton of money, but no real jobs are created.

I think this system is bankrupted, and that micro-investment is the way of the future, the true invisible hand of the market. There will be speculation with the micro-investors, but certainly more jobs will be funded at the micro-level, and more innovative activity would take place at this level. I think a lot of laws are against it, but given the technologies of today, they can’t be justified any longer (justification being they protect investors).

Anyway, looking for more ammo for this line of argument