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Monday, November 19, 2012
"Mountain Hours" Currency - Time To Reflect on Value of Paper Money
By The WealthCycles Staff
A brand new currency has sprung up in Summit County, Colorado, recording the first transaction on April 3, 2012. The notes are named “Mountain Hours,” and more than a handful of communities are using local currency with the “Hours” suffix. There are River Hours in Washington and Oregon, andIthaca Hoursin New York.
However, Joby Weeks and his crew have done such an excellent job promoting the benefits of alternative currency, that the list of supporting businesses in Summit County has swollen to ubiquitous proportion. Check out who will take Hours in and around Breckenridge and who can make change! Listhere.
The affable fellow Americans have a point: this is more than doing something grassroots within your community; it is about “networked usury-free local currencies."
Since 1914, we've borrowed every dollar into existence.
We pay interest on every dollar in existence.
That interest is paid to a private bank, the Federal Reserve.
The world's largest banks, not the government, own the Federal Reserve.
The United States can't pay off its debt . . . it can only borrow more to pay the interest.
Our government created income tax so we can pay this interest.
This means that the way the currency system is set up, debt must grow; it is a mathematical certainty, as each dollar ever created was loaned and is due back plus interest (usury). This creates a system where all free-capital is collected, such as a piece of citrus is squeezed for each last drop of juice. No wonder income feels like it was higher in the 1960’s--it was. Mike Maloney continues:
Now you may be asking yourself; "If we pay back all the currency that was borrowed into existence, but we still owe the interest, where do we get the currency to pay the interest?" Answer: We have to borrow it into existence. This is one reason why the national debt keeps expanding. It can never be paid off. It is mathematically impossible.
It is no wonder that a system that is set up to constantly expand exponentially finds deflation as destabilizing and, most importantly, is destined to fail. Every instance of paper currency in history has failed, and none have lasted longer than 100 years! On the subject,MtnHours.com lends this anecdote:
The eighteenth-century philosopher Richard Price identified this miracle of compound interest and observed, somewhat ruefully, that had he been able to go back to the day Jesus was born and save a single penny—at 5 percent interest, compounded annually—he would have earned himself a solid gold sphere 150 million times bigger than Earth.
This should demonstrate in no uncertain terms that a debt-based economy, with the compounding interest that comes with it, cannot exist permanently.
A few always ask if these alternative currencies are legal. The criteria for legal local currency design are simple:
Must correspond to a specific dollar amount.
Must not look like Federal Reserve’s dollars to avoid confusion.
Just as gold and silver coin were said to be a set dollar value, the alternative money is required to be linked to the Federal Reserve’s dollar. The government supports fixing the price, supporting the dollar by limiting the benefits of the alternative. In this way the Federal Reserve’s dollar is pegged to the competitor, so the competitor is unable to appreciate comparatively.
This, of course, never works for long: the market understands supply and value and knows that, while prices are meant to carry this information, in reality they are “fixed” or otherwise manipulated.
One good example is the fix that persisted for years in America, in which it took $20 to exchange even for a 1-ounce gold “double eagle” coin. In this case the market does not believe the fundamental value to be the legislated exchange value, and when the disparity grows too large, gold closes the gap to cover all of the additional currency and credit now supplied.
Whether you are exchanging the Federal Reserve’s co-opted dollars for coin, in order to save, or for local currencies, in order to facilitate trading, either way diversifying the medium of exchange held within your family unit is prudent.
If one day you were to wake up and find that dollars were no longer trusted, Mountain Hours might turn out to carry more clout locally and hold more value and purchasing power. Another way to think about this truism is to consider pre-1964 U.S. silver coins: while evenly exchangeable for paper dollars (like Mountain Hours), they carry a known premium because they are not being created out of thin air. The scarcity and recognizability ensure a premium, and the dollar conversion rate merely sets the floor.
With this simple analogy, one can move forward obtaining local currency and spending it with confidence in his or her own community, collaborating with others in a sustainable manner.
We are of the view that diversification into gold and silver coin is prudent for saving and for spending in larger private transactions, while maintaining a small balance of dollars for planned monthly spending needs. Diversifying this subset of your family's wealth into alternative currencies for recurrent local spending puts those you trust most at the head of the pack. Now that is something we can howl for!
NOTE: This article is originally published at this website: