Excellent job, Barry. Thank you.
Iâm working on a design of local tokens backed by a fixed redeemable exchange rate with goldback money. I think the ultimate name would be âGrainâ as in grains of metals, food and otherwise. The physical token would be in standard grains (which is a weight measure) like 10 grains pure gold, 100 grains or even 500 grains. There are 480 grains in a troy ounce of gold. Plus, the token would exist on a DGB crytpo backbone (which is the most decentralized of all the cryptocurrencies) and we could go back and forth between a physical representation and a digital representation. Design details have to be finished and test tokens created but Iâm underway with this and it could fit in nicely with all this.
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I think it is a perfectly grand idea, and it will take hold about 15 minutes after the lights go out. As long as bad money is enforced by an evil empire, people will not go along in big numbers. When the lights do go out, the metals held by people in this community will become the currency lubricating their local economies. Just keep stacking my friends.
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Something about what you said raises my hackles⊠one of the ideas behind a CBDC would be that they would be able to force a negative interest rate, a little like what you had mentioned.
Iâm not against using extreme measures to fix extreme problems, and if it worked, then it worked. I am curious (being lazy to look it up, but I will try) why I would accept a note that would expire tomorrow⊠and I am also curious the negative connotation of the private hoarder. If I work as a fry cook and never spend my pay (hoarding it, saving it) then itâs equivalent to the system as if I were working free of charge, no?
But I would agree that real money being in hiding is, if not a direct problem, then immediately downstream of a big problem.
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I am now officially doing some research on this. The central bank of Austria shut the Worgl currency down. A ban is not necessary unless people are willingly partaking in it, so it was comparatively successful. A followup question I had was, âWhat was the central bank of Austria up to at this time?â I would jump at the chance to acquire currency that loses 1% of its value every month, if the main currency I was using was losing 20% every month.
Next door to Austria at this time was Weimar Germany, which did not have any problems with a depreciating currency. And in the US, the infamous socialist FDR went out of his way to destroy private liquidity by via gold confiscation in early 1933 (another largely successful attempt to destroy competing currency). Something about this story does not add up.
(Austrian centralish bank in the approximate era. tl;dr, they made all the failing banks join up to make the Voltron of failing banks, which was on the cusp of either hyperinflation or total collapse bail-in, which does not make for confidence in the currency)
I think the moral of the story is that competing currencies = good, and central banks = bad. But I have caveman brain. Thoughts? Not trying to attack you, something just didnât add up in the story for me!
Edit: Fully reading the article from Finaeon, they sang praises of Bernanke for stopping deflation, gross. Editorial bias aside, I think the reason the Worgl succeeded was because it was not the Austrian schilling, backed by the full faith and credit of the âwoops we donât have any moneyâ bank of Austria.
It certainly solves the main problem with local currencies, which are normally basically âfiat currenciesâ or âgift certificatesâ. Also since many expire, they in fact are NOT a store of value. I know, circulating money in a local economy has value in itself, but just as in the barter economy, where I may not need the other end of the barter, I also may not need to buy anything today. Trying to circulate money faster plays into the âconsume more scarce resourcesâ mind set that is destroying both economies and the environment.
The original experiment had smaller denominations, which again encourages 1) not overspending on things not really needed and 2) being able to easily purchase smaller items. A $70 minimum value is like getting rid of pennies. Itâs encouraging the exact opposite of what most people want- lower prices, more affordability. Even encouraging people to use the tokens to âsplurgeâ on a expensive item plays into consumerism. In a world of decreasing resources, local currencies should perhaps encourage frugality.
Love the idea of such tokens having real value in the precious metal content. That really makes this real MONEY - that is a store of value.
There is a push to fight CBDCs by using as much cash as possible. Cash is not a good store of value due to inflation. Financial instruments are gamed by wall street insiders. Having a local circulating currency (in amounts under $70) will fight digital controls and be a good way to get people used to what could be done with coinage when the dollar collapses.
This might be a good start.
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