A Local Currency?

[Dave M]

"The intrinsic value would need to be connected to something that only the coop can provide"

Exactly.. for example the gold standard. There were actually people that thought our economy would become over inflated and eventually fail just because we left the Gold Standard.. Imagine that! Oh well I need to get my cardboard sign and get down to my corner. []

Blessings,
dave

"It doesn't mean that much to me.. to mean that much to you." Neil Young

[JWFITZ]

Dave, that's right, but in the case of local currencies the standard is not typically gold, but local production and infrastructure. It is, however, by nature a hard assets backing.

[Dave M]

Hey Fitz,

Wouldn't it be easier to set up a Barter Co-Op? Am I missing it all together? The Co-op I was in was generally used to purchase items in bulk and pass the savings on to the members. LOL.. I guess mine sounds like a glorified Sams Club.

Blessings,
dave

"It doesn't mean that much to me.. to mean that much to you." Neil Young

[JWFITZ]

Barter is unquestionably another part of the whole picture, but the basic issue remains that money is very convenient for exchange in a manner that goods cannot every be. If I build the case example chicken coop, I don't want to get paid all at once with 600 pounds of papayas. A local currency is in essence and "on demand hypothetical" sort of barter, and offers a lot of practical advantages.

Financing is the big one.

If for example, on other topics--not suggesting it's something I want to do, but look at how it works. It is an interesting illustration. Let's assume we had Punabucks up and running, in a manner in which labor and basic goods could be, in a reasonably conveniently manner, purchased with the script.

Suppose someone wanted to build a charcoal kiln to produce bio-char. Let's say there is a certain amount of interest in the community for someone to do this sort of thing--so the system administrators allow a "permit" for the would be charcoal manufacturer to issue bonds for Punabucks at an agreed rate. This is no different than any other sort of bond. The trust in the value of the bond is equal to the trust in Punabucks, whatever that is, and trust in the charcoal guy, whatever that is. If it doesn't exist, everyone is out of luck. No different than any other currency, but the trust element is immediate--not fictitiously contained somewhere in some authority. If the project is doubtful, or the characters involved are questionable, or whatever--it's not going to happen.

So, the charcoal guy then issues bonds, purchased in dollars, for Punabucks. He ends up with cash in dollars, and now can afford to take the risk to build the charcoal kiln. Others end up with Punabucks at some rate of exchange, and the community ends up with a charcoal kiln and the ability to purchase bio char in Punabucks.

The essence of any currency is contained in trust. And only trust. The difference in a local currency as opposed to the status quo, is the trust is wholly immediate. It is contained in my neighbor. In the status quo, it's contained at Goldman Sachs. This isn't a snarky comment--it really is.

Who do you trust more? Who should you trust more? This is the basic issue.

[hooligal]

I overheard a piece on NPR about a bartering management company. Google search 'NPR Barter" & it'll come up. Sounded interesting, but I didn't listen closely enough to how it works.

I came from a large community of artists & we barter amongst ourselves a lot. It takes some getting used to but it does work. I found the hardest part was assigning a non dollar value to labor or goods. There's always fits & starts while you figure out the true value/quality of a person's skill set. But then, I guess that's true when you're pay in dollars too []

* I'd rather fail at happiness than succeed at misery *

[Dave M]

Yeah "trust" would be paramount. I guess as an American my trust button has been somewhat de sensitized(sp). I guess you could set the whole thing up as an NPO? But how would the individuals explain "puna bucks" to the IRS. Would they have to? I knew some folks that were raised in a commune and they did have a credit system, but they weren't allowed to access the system until they had proven themselves ie: building a house or some other form of substantial input. I guess it would be functional for someone who had a necessary trade(plumber,electrician etc..) Interesting stuff for sure.

Blessings,
dave

"It doesn't mean that much to me.. to mean that much to you." Neil Young

[JWFITZ]

Trust is the key. You will not succeed in Punabucks unless--A) You are trustworthy. B) You offer real goods and services for reasonable prices C) You actually are a contributory member of the society. Otherwise, you'll use dollars to trade with other folks or people you don't trust so much. I'll suggest when you create a system where it's profitable to be fair from the start--it can have profound impacts on a community.

In the posted links one will find many sources of how taxation and other issues are handled around the world. It is no problem at all and turn key software and legal contracts are available at no cost from successful organizations that advocate such programs.

The possibilities are endless and such organizations can be very powerful indeed with dealing with community issues. Take for example the crime problem in HPP that some have been concerned about. One can get together with FoPF or the city or whomever to attempt to figure out what could or need to be done. OR, you could go to the "Bank of Punabucks" and hand them a proposal--we need 10000 US dollars to fund a private security company to patrol HPP. If the "Bank of Punabucks" decides that this is a project of significant enough value to issue a bond charter--they do. At that point individuals are able to purchase "punabucks" at a favorable rate--and the cash goes to security. Turnkey, fast, efficient, cost effective, and no political BS involved. People vote with their dollars, and dollars only, and in many way the worst aspects of the political process are completely bypassed for the good of all. A week later, you've got security.

Or so it could and does work in places.

[Darren]

A local currency would seem to empower a community concerned with local reliance. Local reliance is the logical realization of, what politicians sloganize as, "energy independence." Ironically, the very same leaders are in on a racket entirely antithetical to local reliance. Such that, playing it out, to foresee and strategize for the intrinsic antagonism from stakeholders in the centralized, global, corporate thing-would be worth doing. I recall that the big Permaculture book had some scoops on a local currency. Regardless of the currents of independence from distant maligned systems that would call attention, I think a community health (essentially) oriented local currency, functioning alongside the greenbacks is way sensible. (Somebody once said, "The devil is in the details.")

[JWFITZ]

Local currencies have proven to be very effective tools for real community health in both times good economic times and times of crisis. It is certainly not a new idea, but it is an idea that is very timely.

We simply need a group of people who are farsighted enough to understand the mechanism and merits and get the ball rolling.

[legalcarroll]

We had local dollars when I lived in Lawrence, Kansas. All of the original influx of local money was purchased (I believe at a dollar for dollar exchange rate). And anyone could purchase additional money as they liked. Businesses that accepted local dollars gave a discount for customers using the local money (like a kama'aina rate). Pawn shops and consignment stores would pay you for your goods in local money!

This was a great program and it really supported the local economy and local business'. I would love to offer what ever support I can in researching and developing this idea further.

Please contact me with more information.