Complementary Currencies

[Rajiv]

Funny Money by Emily Lambert - Forbes Magazine

he dollar has some competition in Traverse City, Mich. The contender is the Bay Buck, a colorful currency launched last fall. To be sure, it isn't about to replace the dollar anytime soon. And at Wal-Mart Stores and Starbucks, it's as useful as Monopoly money.

But Bay Bucks can be used to pay for real goods and services, just like dollars can. And supporters say that using Bay Bucks promotes the local economy.

Bay Bucks are a local currency--one of a handful circulating in the U.S., including Burlington Bread, Ithaca Hours and, soon, BerkShares in Massachusetts. Besides being fun to trade and talk about, these currencies are meant to circulate near their home base, not to be ferried off to corporate headquarters in Arkansas or Seattle.
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So are these things legal? Lewis Solomon, a law professor at George Washington University and author of a book about local currencies, says local currencies are legal with some stipulations, including that they have to be printed (not coined) and that local money cannot resemble dollars.

By most accounts, local currencies resurfaced in the U.S. in 1991 in Ithaca, N.Y. Then-resident Paul Glover, now living in Philadelphia, says many of his neighbors were unemployed or underpaid, and he was looking for a way to fatten their wallets. He and a group of supporters created the Ithaca Hour, each one equal to either $10 or one hour of work.

[Sapiens]

Re: Complementary Currencies

Rajiv,

Did you notice the problem of consistent demand for these currencies? If they were to be loaned out into existence, they would have a demand imperative... Kinda like the present fraud... Darn!

-Sapiens

[Rajiv]

Re: Complementary Currencies

Not if they were redeemable for something like the "constants" of Ralph Borsodi

Dr. Borsodi spent decades analyzing the ills of modern society and imagining remedies for the problems. His 1968 work, published in India, and titled Seventeen Universal Problems of Man and Society, catalogued his research and can be considered the beginning of a modern taxonomy of human problems and solutions. His followers felt he usually was working at solving problems at least 20 years before most analysts realized the problem existed. For example, it is said he predicted the inflation of the 1970s some thirty years before it came. One of his interests was in local currencies, and he started an experiment with such a currency in his home area, Exeter, New Hampshire. Borsodi and Swann did establish a local, alternative currency in Exeter; however, the project came to an early end with Borsodi's failing health. He created a commodity-backed bartering currency called the Constant. These appeared first as paper notes, but in 1974, coin-like pieces, called Globes, were minted and sold in 1/2 ounce and 1 ounce .999 silver denominations. The non-profit organization that sponsored them was the International Foundation for Independence, Inc., but the Globes were minted and sold by an organization called Arbitrage International.

Also "THE BORSODI CONSTANT AN INFLATION-FREE CURRENCY"

Dr. Ralph Borsodi (see the Plowboy Interview in MOTHER NO. 26) is chiefly famous for his successful experiments in self-sufficient living. There's another side to the man, however, that is of increasing importance in this time of runaway prices: his long-term interest in inflation, its causes and cures.

To be downright blunt about it, Borsodi does not believe that a steadily shrinking dollar (or yen or mark or franc or whatever) is quite the "accident" that politicians usually make it out to be. Quite the contrary. In his view, governments cynically and stupidly debase the purchasing power of their currencies on purpose by printing too much paper money. Why? Because modern politicians and the economists who advise them are—in the main—rather weak-willed animals who lack either the power or the fortitude to run a country on a strictly pay-as-we-go basis.

"It wasn't always this way," Borsodi points out. "During most of the last century, the majority of economists preferred gold and silver or currencies that were solidly backed—unit for unit—by such real wealth. The prevailing doctrine among those economists was that the worst possible kind of money was 'printing press' money . . . currency backed by nothing except the word of the government which issued it. They called this fiat money. They didn't have much regard for it.

"All right. Along came John Maynard Keynes. He was a very influential economist in England from about 1915 to 1946 and he invented the idea that we can insure prosperity by 'controlled inflation'.

"Keynes' theory, you see, is that a government can steadily expand a country's economy, even during periods of what would otherwise be a recession or depression, by pumping a little 'extra' money—a little printing press currency—into circulation.

"Now Keynes knew that this would dilute the purchasing power of every unit of money already in circulation. If you have more units of money trying to buy the same amount of goods and services, you know, prices inevitably go up. You have inflation.

"Keynes was willing to accept this debasement of currency, however, because he thought that a government could inflate its currency just a little bit and just once. Then, as the Good Times began to roll in that country once more, the government could stop pumping the extra units of money into the nation's economy.

"Well that was a nice thought, but politicians don't seem to work that way. Planned inflation is just like planned drug taking. It doesn't work. You always need a bigger 'fix' the next time around. Politicians have never stopped inflating a country's currency once they've begun. Quite the contrary. They just keep on giving a nation's money supply a bigger and bigger shot in the arm until the whole situation runs away with itself. And that's what's happening on a global scale right now."

[metalman]

Re: Complementary Currencies

Funny Money by Emily Lambert - Forbes Magazine

So are these things legal? Lewis Solomon, a law professor at George Washington University and author of a book about local currencies, says local currencies are legal with some stipulations, including that they have to be printed (not coined) and that local money cannot resemble dollars.

two strikes against the liberty dollar guys. amazing that the feds took as long as they did to act. the wheels turn slowly. but once they get going the are also hard to stop. who wants to get caught up in that? yuck. what a way to spend your time. pointless and futile.

[Rajiv]

Re: Complementary Currencies

From a recent Tome Greco newsletter

I'll be moving over to a hotel that will give me easy access to Heathrow airport in preparation for my flight back to San Francisco on Monday. Fortunately, the $150 tariff will not further deplete my available cash because the booking has been arranged through Bartercard and will be paid from my Universal Currency (UC) account. UC is a private credit system that enables commercial trade exchanges ("barter" companies) to transact business with one another without using conventional money. I am an exception in that I have a personal account. My credit balance came about when I accepted UC instead of cash for my honorarium that was paid when I delivered the keynote speech at the 2006 IRTA convention.

Bartercard, which started in Australia, has extensive operations in the UK. It is one of the largest (among many) cashless trading operations with franchisees in several countries around the world. While cashless exchange based on credit clearing remains mostly unknown, here is evidence of viable, highly developed structures that are being used today to mediate the exchange of significant amounts of valuable goods and services internationally.