Monday’s USA Today story on local currencies generated a busy week of news coverage about the growth of the PLENTY, and our upcoming relaunch in partnership with Capital Bank.
We’ve seen followup coverage by Greensboro’s WFMY, with an excellent article posted by Justin Quesinberry. Also, look for a segment on Time Warner’s News 14 — Lyle and I enjoyed an interview with Ed Scannel at the Piedmont plant today. Folks from Capital Bank, Chatham Marketplace, and other local businesses have also been doing interviews, and our Executive Director Melissa Frey will be on WPTF AM 680 with Sanford Harold at 7:40 am tomorrow.
While we didn’t expect this publicity in advance of the relaunch, Lyle predicted it. Months ago he proclaimed, “Local bank accepts local currency — that’s national news.”
And indeed it is. The most rewarding part about this discussion is engaging with media folks who have started asking essential questions about the nature of money. Specifically, I had a long conversation with a reporter last evening who was convinced there was a catch. His question centered around Capital Bank — how was Capital Bank not at risk in exchanging the PLENTY? What would happen to Capital Bank if the PLENTY “became worthless” and everyone wanted their dollars back?
The key issue is how new money is placed into circulation. Since Capital Bank doesn’t give someone a PLENTY until they’re given a Federal Reserve Note first, the dollars necessary to provide exchange services for the PLENTY are always there — they’re just waiting “in reserve”. The fact that the PLENTY is “fully reserved” means that the PLENTY will always have value in terms of the commodity behind it — initially Federal Reserve Notes, and over time it is reasonable to anticipate flavors of PLENTY that are redeemable in other locally-produced commodities, as well.
I’ve struggled to find a good way to explain these concepts in memorable sound bites. Here’s one attempt: You create the value, we create the currency. Voluntary barter currencies typically lose acceptance when people realize that the newly-created money is not guaranteed to be redeemable for anything, and that acceptance is solely a matter of trust. The temptation to print “too much” fiat currency is too great, and an organization creating money out of nothing assumes a position of unnatural and unsustainable power.
The PLENTY organization is only creating a currency as a medium of exchange to benefit the community — we are not claiming to create value.
How does that work? Again, the key issue is how new money comes into circulation. A new PLENTY only enters circulation when someone in the community takes a hard-earned Federal Reserve Note and exchanges it at Capital Bank. That’s it.
The PLENTY organization cannot make grants or give away “free money” — clearly, the folks who exchange their labor, products, and services for PLENTYs don’t want someone else making promises that they are expected fulfill. In other words, a currency should be a servant of those who produce in the community. It should not be our master.
There will be more announcements over the next week regarding timeframe for our relaunch and membership drive. For specific questions, don’t hesitate to contact us.
BJ,
I wish you all the best with this initiative, but I have to say that this local currency seems to me to be fatally flawed by being pegged to the counterfeit currency issued by the federal reserve. The key reason to choose any alternative to federal reserve notes is to escape the inflation.
What I would advocate is local coinage, as many private mints did in California during the gold rush. Today of course you’d want to be able to make much smaller denominations, perhaps by making coins of some transparent material with gold or silver embedded in them. I’d be very happy to use a coin that had several grams of gold in it in place of a US $20 or $50 bill.
-jcr
John — Yes, the long-term viability of Federal Reserve Notes as we stare down $ trillions in bank bailouts and unmanageable entitlement obligations is definitely a concern.
We’re starting with a local currency that is backed and redeemable in Federal Reserve Notes because that’s where the vast majority of people are “at” with respect to their monetary education. A local currency backed by a debt-based currency is not where we stop, however.
The intent is to awaken people’s appreciation for monetary choice and monetary freedom, and the power of currency that’s guaranteed to be redeemable in something else of value. The bylaws support issuing other “flavors” of notes that are backed by/redeemable in other commodities, as well. These could include locally-produced biodiesel, agricultural commodities, or of course gold and silver.
Another example are Mendocino Food Futures in California — they’ve gone straight to “food money” that’s backed by and redeemable in locally-produced agricultural commodities. That’s one way to allow the money supply to expand based upon the real productive output of our local economy, not the arbitrary whims of a central bank or credit expansion.
You may have your own currency and you may create your own local economy but you have done nothing to fix the rot of government. Companies should not have been allowed to create the real estate issues or operate the Ponzie schemes if the existing laws were enforced.
Lawmakers who do NOT serve their constituents and people and companies who are not elected control the government. There are too many laws that overlap and contradict or that just does not apply. Laws were not made to benefit but rather to confuse an intimidate the constituents
The top priority of many (not all) lawmakers is to be re-elected. Many lawmakers add “pork” to a bill that will not benefit their constituents but will add funds to their re-election campaigns. A line by line veto will cure that but America needs a national referendum as the lawmakers will not vote against themselves. Lawmakers will not vote for one-term limits. They will not vote for minimum requirements or the ability to show they are capable of managing and budgeting constituents’ money that constituents paid for government services (taxes). Many lawyers are not business people but yet many lawmakers are either lawyers or their parents were lawmakers.
Income tax was designed to create a method to fund the debts of the government created to give benefit to the constituents. The income tax law has become so complex that ordinary people can not figure their own fair contribution. There are so many codes to define what money is income and what money is exempt from the reportable income. Fear of being penalized or inconvenienced by an audit intimidates the ordinary taxpayer and causes many taxpayers to overpay while those who can afford accountants pay less resulting in an inequity where low income people actually pay a higher percentage while higher income people may pay little or nothing.
People should not be restrained from making money or hiring people to use other people’s energy to produce money. The first question on many employers’ minds is “What does the government require me to do and how much will that cost and will it be worth adding that cost to the price of my goods or services?” Let me call my accountant because as a businessperson I know about the product or service I offer but I am not free. The lawmakers have made so many laws that I can not be free to do my business without fear of being penalized. I have to hire a person or staff to figure out how to comply with the laws. This cost inflates the price of the goods or services. I can not stuff money in an envelope and pay my employee or myself for fear of being penalized.
Where did our freedom go? While we may be free to make choices, the fear is that the choice we make intimidates many who would not venture out and create income. When people would rather be employees and share the value of their effort with an employer rather than risk the penalties if they unintentionally violate an overlapping contradictory law we lost our freedom. When we overpay taxes out of fear that we will be penalized for an unintentional mistake we lost our sense of security.
The changes we need are;
? Term limits on elected government positions.
? Examining the laws of each and every department (which should have been done before the law was passed) to determine if the issue was previously included in another law.
? Regulating banks and businesses so people who can afford credit can have it available and those that can not will NOT be victimized by the false opportunities that turned out to be foreclosures and heartbreak.
? Income taxes are so often ignored. There is a trillion dollar “gray” market where income is not reported by the likes of presidential cabinet holders, noted billionaires, Helmsly for one, transients, illegal immigrants, bank robbers, embezzlers, people like Bernie Madoff that made off with and spent billions of dollars. The remedy is to tax spending INSTEAD of income. Sales taxes are more difficult to avoid. If the buyer of the merchandise does not pay the tax the person who sold the item must collect it or pay it. If a millionaire buys a Yacht or mansion for millions of dollars they will pay much more than the wage earner that pays for necessities of life. The wage earner will see an immediate increase in their paycheck and less of a tax burden because millionaires will also pay as they buy. Employers will not have to pay the costs of payroll preparation, which would lower the cost of the goods, or services they offer. The jobs lost by the accountants doing payroll will not be lost. They would need accountants to monitor the collection of sales taxes but it will be at one rate, equal for all with the people who buy the most pay the most.
I will get off my soapbox now but I would appreciate hearing your comments.
David — While I agree with your concerns, I personally have no comments. The PLENTY is a decidedly apolitical endeavor. It has nothing to do with fixing government per se — it is entirely focused on strengthening our economy through private economic activity, and giving folks options beyond the current corporatist system.