Saturday, February 4, 2012

Community Currencies

    According to the US Constitution, only the Federal Government has the power to issue currency. States may "make silver and gold coin a tender in payment of debts" if they so choose, so long as they are from the US Mint. It also allows communities the ability to issue a form of currency. Until recently, only a few communities and no states have done so. This, however, looks to be changing.

  In March of 2011, Utah became the first state to accept US Mint silver and gold coins as payment of debts in their state. South Carolina has proposed a bill which would accept silver and gold coins minted anywhere such as the Kruggerand. Lawmakers from 13 states this year-- including my own state of Minnesota-- have explored or have actual bills in place to issue their own currency.

  On a local level, a dozen or so communities have issued some form of currency, including the Washington DC area, where the "Potomac" is accepted in exchange for goods and services. The largest and oldest of these locals is the CHE {Cascadia Hour Exchange} which is issued in the Portland,OR area. There are now over twenty communities in the US doing this.

  Why is all this happening ?: Ben Bernanke is hell bent on printing our way into either a recovery or hyperinflation. In a word, fear. Should serious inflation {or deflation} take place in the US, I look for these community currencies to become commonplace.

9 comments:

  1. Interesting that you should post this, Mr. K. An organization that I belong to, the "Village Vancouver" group that's working on ways to prepare people for an "energy descent" lifestyle after Peak Oil crashes everything, has a couple of boffins planning community currencies. Currently there are "Dunbar dollars" (named after an affluent suburb, where some merchants on the shopping strip exchange them) and a larger-scale one in a rural region up the coast. They're modeled after several larger efforts during the 1930s Depression in Austria and other Eastern European nations. Those were city- or region-based and died during WW II. In times of trouble, alternative ways of thinking arise.

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  2. Mr K I think that Government will eventually become decentralized and communities will use a type of script as currency to make bartering easier. Whether it is gold or silver backed or just backed by the full faith of the local community will be interesting. I am all for some sort of currency reform. I just don't know what it should be. However, change is coming and no one will be able to stop it once deflation takes down the TBTF banks and corporation that depend on them. Good article as always.

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  3. The idea of using gold or silver is romantic. We should base our currencies on real economical values, like energy, water, land, etc. It would allow us to invest in what we need on a daily basis in a way that allows us to save for our old age.
    Edgar Kampers | Qoin.org @Qoinorg

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  4. Keynes himself suggested holding the currency to a basket of commodities instead of just one like gold or silver. One problem with the gold or silver currencies is that these metals can be manipulated by outside forces {Hunt Brothers, etc} which in turn can play havoc on a nation's economy. On this one, me thinks Keynes got it right.

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    Harry
    harry.roger10@gmail.com

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