Petrodollar Putsch, Complementary Currencies and Sustainable Money
Money: Complementary Currencies and the Need for a Sustainable
Monetary Policy in the U.S.
The almighty US dollar, as we know it, is facing possible, if not likely,
collapse in the coming years. Either from another bout of quantitative
easing or a successful petrodollar putsch favoring the renminbi, rial, ruble or
even gold – American monetary hegemony is at a crossroads. Once the sell
off begins, there is no turning back.
What was once an obscure topic
– the Federal Reserve – has in recent years, because of Ron Paul, the Tea Party
and Occupy Wall Street movements, almost become part of retail politics.
Americans are overwhelmingly in favor of a full and public audit of the Fed and
outright abolishing the nearly 100-year-old private central bank is not out of
the question. What is in question is: what system would replace it?
While many a prepper would
argue that having one’s own means of production is the only real way to ensure
the individual in the coming inflationary squall, the country’s monetary policy
has options – diversify. The currency in which we hold our assets –
the Federal Reserve Note – can be exchanged for gold, silver and other tangible
and exchangeable goods. Our communities can also initiate and
participate in multiple alternative currency networks.
Ron Paul has proposed a return to the constitutional gold
and silver based currency that was in place since the founding, and has also
proposed a Free Competition In Currency Act, which calls for the
“repeal the legal tender laws, to prohibit taxation on certain coins and
bullion, and to repeal superfluous sections related to coinage.” Under
the Federal Reserve’s stewardship the US dollar has lost most of its
traditional value (take a look at their own numbers), hence the recent historic
heights of gold and other precious metals – Gresham’s
law in full effect.
What many people don’t know is that several localities
already issue their own local currencies. Charlotte has a “plenty.”
Ithaca, New York has “hours” (a time-based currency). Washgton D.C.
has a local currency called the “potomac.” Detroit also, in response to
the current crisis, issues local scrip (any currency which is not legal
tender) known as “cheers.” These are modest initiatives but they hold
The US Constitution allows states to issue their own currency,
as long as it is back by gold or silver. Utah recently passed a law where
gold and silver coins issued by the US Mint can now be used to pay state taxes
and are considered legal tender. Other states are following Utah’s
The most successful case of a contemporary
American complementary currency are the “berkshares” from Berkshire,
Massachussetts, which trade at 100 berkshares for every 90 US Dollars.
Community banks act as currency exchange. One must then spend the
berkshares at one of the more than 400 local businesses that accept the berkshare.
Groceries, cafes, theaters, produce, pretty much all that is local can be
purchased in the local currency.
Businesses who accept berkshares are also
encouraged to buy and trade with each other in order to take advantage of the
10 % discount that the local currency offers. Goods are bought and sold
for the same amount in both currencies. What this ensures is that wealth
stays local for the long term and that local products and services
are given a priority over imports. It gives people a strong sense of
communal pride, and keeps the community loyal and fiscally strong. It also
gives small local merchants leverage against major corporations, since their
goods can be purchased at a 10 percent discount. Both merchants and
consumers benefit. More on the berkshares.org.
film about community currencies or complementary currencies is ’2012: Time for Change’. Gift certificates
are the most recognizable example of scrips (another name for them). There are
also virtual currencies, the most popular one being “bitcoins.”
Mutual credit societies have had popularity in Japan for some
time, and these models are being replicated in parts of the US where great
numbers of people have suffered persistent unemployment and have a need for
alternative ways to pay for basic goods. The currency in mutual credit
societies is usually time-based (an hour of labor or service) and can be
exchanged with any person or business on the network, which is usually
comprised of neighbors, family, and friends. In this way, the flow of
goods within that community is facilitated and basic needs are much more easily
met without relying on the wage-slavery system. In New York, the Ithaca ‘hour’
is one such currency. It’s currently worth ten federal dollars.
One other way to stimulate a local economy, particularly in
agricultural or rural communities, would be to go back to a previous age when
the currency was set as tied to the value of a crop. The Aztecs, for
example, used the cacao bean as currency. Units of corn, or other goods, can
also be tied to a currency. The idea is that the currency must have some tangible value and not
be based on debt.
One negative aspect of crop-based currency, however, is that
once the produce has gone bad the currency devaluates so that its value is
affected by the freshness of the product, by weather, and other random
factors. But we should not rule out crops, particularly in regions
with a solid agricultural infrastructure. Crops might still
efficiently serve as a seasonal currency,
and should be used creatively and with other complementary currencies
within a dynamic economy.
Public and/or cooperatively-owned granaries could
serve as community banks, and the local agricultural wealth could provide
additional liquidity to the community, since by its nature the currency
must be spent or consumed within a fixed time range. Some European communities
have local currencies where an expiration or devaluation date on the bills has
a similar effect, ensuring that money continues to circulate within the
If the value of a crop can be fixed to a certain amount of time
in terms of human labor, the currency goes from being seasonal to being a
more comprehensive and dynamic expression of the community’s wealth,
resources, and production.
An hours-based currency implies a radical democratization and decentralization of
the power to issue money, since all humans can produce labor, and
therefore value. An hours-based
community currency places the power to issue money in the hands of the
majority, of the workers: it fully democratizes money, abolishes the monopoly
on issuing a currency and empowers all workers as entrepreneurs and producers
of value. It would give the people leverage against the current
There have been other ideas that have been proposed and are
being discussed, the most interesting one being the use of kilowatts as a
currency. This would produce a huge incentive for people to generate
their energy locally and cooperatively. Energy is universally needed
and its demand has created some of the most powerful, and therefore some of the
most dangerous, monopolies on Earth. The use of energy as currency
would increase awareness of the imperative that both energy and the means
to generate it should remain in the hands of the people, or at the
very least it might generate awareness of how those who control it,
control our civilization and stability.
The same happens with the power to issue a currency. This
all-pervading power is currently in the hands of an unelected cartel
of private banks that does not participate in any way in our democratic
process and is accountable to no one. The result of this is that, while
banks profit daily and universally from everyone’s debt, we are
helpless consumers and have no right and no means to begin a dialogue about how
our currencies should serve and benefit our communities. Again,
the more decentralized and democratized that the power to issue money becomes,
the more social and economic justice there will be. I believe that we
should move from the current money monoculture to a healthy
ecosystem of local, state, and federal currencies.
By creatively working with our currency paradigm, those of
us that have been chronically underemployed may be able to turn the problem of
corporations not willing to give us work, even as they dwell among us in our
communities and make a huge profit, into the fulfillment of our highest
aspirations and an opportunity for, at least, partial human
emancipation from limitless corporate power.
We may even be able to abolish wage slavery in some communities
and allow people to earn a living wage while working 15 to 20 hours per week:
Jacques Fresco proposes that this may be unavoidable some time in the future,
as we are forced to reassess our entire notion of labor due to jobs going
to China and India and to the machines we’ve created.
Curiously, machines took the load off of the backs of horses and
oxen, but when we allowed machines to replace us, we did not reap the
liberating benefits that we saw with the partial abolition of animal
slavery. We allowed machines to replace us, but continued to live
under a dehumanizing system of human labor with continually diminishing
wages for the majority of humans while the members of a wealthy
class reaped the fruit of our work.
Strong local economies where the most universally used and produced resources,
and of course the machines, of a community are cooperatively-owned
and lessen the load of human labor -as it should be- might be one way
to abolish wage slavery, take us to a shorter work week, help us to regain dignity
and realize a true living wage.
As David Rothkopf in his book Superclass points out, ever since 100 million
died in the last world war during the honeymoon of modern science and warcraft,
overwhelming force has since fallen on hard times. The international
banking cartel can’t very well go into a country and plunder its resources
as it did yesteryear, but they can give Haiti or Zimbabwe loans at 29%
interest. Unfortunately there isn’t an international banking bill of
rights to prevent the IMF or World Bank from sucking the lifeblood, labor and
wealth out of the most helpless members of the human race
and enslaving everyone through debt.
If the current debt based paradigm is to be changed sustainable
currency ecology with numerous locally and democratically controlled currencies
and strong community focused economies need to replace it. A community
that can produce interest-free loans to its citizens for education and housing
is less vulnerable to exploitation by corporate banks. Oddly enough
Sharia compliant banks, prevented from excessive usury, are taking a larger and
larger role throughout the Middle East and may provide a model to emulate.
In the same way that a monoculture can be catastrophic to a
farmer, whereas crop diversity protects farmers from losing everything, diversifying
our currencies and means of exchange might also serve as a type of insurance
against currency fluctuations.
If and when the Fed is abolished, those of us that can’t afford
to buy silver or gold these days and who don’t own land and other means of
production, won’t find it so hard to adjust during the currency crisis
that we may be facing in the near future.
This is all food for thought. I didn’t even know
a year ago that many complementary currencies that aren’t tied to bank
debt are already in existence in the U.S. I’ve come to believe that
an international campaign to educate citizens about alternative banking
needs to take place. Cities or neighborhoods with strong merchant
associations, Community Banks, and Credit Unions are perfect experimental
grounds that already have the beginnings of the community infrastructure needed
for implementing new complementary currencies.' (snip) ...
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