Local currency/barter proposal unveiled by Asheville Currency Project

Mountain Xpress staff reporter David Forbes covered the Dec. 4 presentation of proposal for a local barter/alternative currency system by the Asheville Curency Project. Pending Forbes’ completion of his detailed coverage of the meeting and the project, here’s a summation of his Twitter-based comments, sent during the meeting.

• Crowd gathering at Bobo’s for the Asheville Currency Project presentation.
• Avl currency project advocating “mutual credit clearing system” as a model for the city.
• Local credit would be issued by a nonprofit, with no interest charged.
• The project concept is based on LETS, or “Local Exchange Trading System”: Members sign up via a database, listing their skills. They can then write “vouchers” (make payments), and exchange LETS “units” for services they render or request.
• There’s no interest charged on a negative LETS balance; rather it’s seen as “commitment to community.”
• Jim Barton (@smithmillcreek) explains: Currency initiative began after local businesses, including Harvest Records, Orbit DVD, expressed interest. Local currency projects are usually disorganized, suffer from burnout, and are dependent on volunteers. To counter this, the Asheville project making detailed plans.
• Avl currency is intended to be accessible to the “unemployed, those with no financial assets,” Barton says.
• Avl Currency Project is looking for donors, fiscal sponsors. It’s also looking for designers and ideas for a name for a paper version of local currency.
• Avl currency project will issue credit to local businesses, who will then distribute currency.
• Audience members are doing simulation of local currency circulation — with paper hats.
• Avl currency representative Bob Leroy says: There’s to be no fixed exchange rate between local currency and U.S. dollars. Local currency is intended to be circulated, not saved.
• Local currency may be pegged to the value of commodities. The currency project is still seeking input on matter.
• The local project will launch in September 2010; signing up of businesses begins next summer.

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48 thoughts on “Local currency/barter proposal unveiled by Asheville Currency Project

  1. Marshall Hance

    What is wrong with dollars? Some people have more of them, others less. I agree that sometimes feels unfair but it doesn’t effect the buying power of the dollar. Certainly it can be argued that the dollar’s value is tenuous, but not like a local currency!!!

  2. travelah

    What happens when a patron of an establishment insists on using this barter currency and the business refuses?

  3. T100C-1970

    The IRS is going to “love” this one. (As are the sales tax folks at the State Dept. of Revenue).

  4. Asheville Dweller

    You know this has been trying to get the green light for years.

  5. Dave

    Other communities have set up this type of system with great success. I look forward to participating! Do some online research for contacts before “reinventing the wheel”. As for a name for the currency around here? Seems a natural fit would be: “Casheville Bucks”

  6. I am member of the Asheville Currency Project, the people introducing this local currency (which, while friendly with Asheville LETS, is not part of Asheville LETS. I don’t think this article made that sufficiently clear.) I will try to answer your questions.

    Marshall Hance: The problem with dollars is that either there’s not enough of them (in the form of credit), which causes recessions and depressions, or there’s too many of them, causing inflation. This is because the Federal Reserve is using a bad model, is applying one-size-fits-all solutions to local problems that need more fine-tuned local solutions, and is working in the interests of the government, not the market. And while the dollar is backed by the government’s reputation, and its ability to coerce people to take it as payment, this local currency would be sound money, backed by the goods and services of local businesses. So yes, the alternative currency’s value would be nothing like the tenuous value of the dollar.

    Travelah: Something this article didn’t make clear (to be fair, this is only a preliminary article, and space is limited) is that the participating businesses would be the ones issuing the currency. The amount of currency they can issue would be based upon the goods and services they provide, and would be backed by those goods and services. When a business signs up with us to issue currency, they would sign a contract obligating them to accept an amount of the currency equal to what they issue. If at that time they wish to discontinue their participation, they can. That means that at any time, they can present us with the currency back, and be under no obligation to continue accepting it. Obviously, we hope they don’t feel a need to exercise this option, but it is there.

    T100C-1970: The rule of alternative currency, which has served many of them well, is that for tax purposes you should treat alt currency as cash. Do with it, and report it, as you would with cash. The Asheville Currency Project is emphatically NOT suggesting or encouraging that people do anything shady with the IRS. That is not our mission, it is not our focus, and it is not what we’re about.

    Asheville Dweller: While it is true that many people in this area have been interested in this sort of thing for a while (myself included), and that there have been alternative currencies in this region before, with varying success, I believe this current approach is different, and has the best chance for really succeeding and thriving for the long term. We are basing our model on the one outline by noted researcher Thomas Greco. You may find his ideas on the web, and his books in many of our city’s more interesting bookstores.

    Dave: Thank you for your kind words. We are actually hold a contest among people who register as a “Friend of the ACP” to name and design the currency, so you might want to submit it there.

    For more information on the Asheville Currency Project, please visit our website at http://www.avlcurrency.com.

  7. travelah

    Travelah: Something this article didn’t make clear (to be fair, this is only a preliminary article, and space is limited) is that the participating businesses would be the ones issuing the currency. The amount of currency they can issue would be based upon the goods and services they provide, and would be backed by those goods and services. When a business signs up with us to issue currency, they would sign a contract obligating them to accept an amount of the currency equal to what they issue. If at that time they wish to discontinue their participation, they can. That means that at any time, they can present us with the currency back, and be under no obligation to continue accepting it. Obviously, we hope they don’t feel a need to exercise this option, but it is there.

    In this ‘tarded town of protests for everything under the sun, it would only be a matter of time before some poor raghead demands that the proprietor accept his goober bucks for the meal he just consumed.

  8. Jim Barton

    Some corrections (hard to take notes, I know)
    – probably more accurate to say that Orbit and Harvest expressed “openness to hearing proposal”, though both were interested
    – First wave of currency (1990-2003); Less true of 2nd wave, which includes Great Barrington, MA and Totnes, UK
    – another panelist said “Avl currency is intended to be accessible to the “unemployed, those with no financial assets” (Amy, perhaps?)
    – I wouldn’t say this model is “based on LETS”– it is a different animal, mutual credit clearinghouse

    Thanks for writing this up– the panel was fast-moving at times. I didn’t fully explain the 1st vs 2nd wave of local currency in my 180 second talk.

  9. Piffy!

    [b]In this ‘tarded town of protests for everything under the sun, it would only be a matter of time before some poor raghead demands that the proprietor accept his goober bucks for the meal he just consumed. [/b]

    Is this really a concern of yours? “Poor raghead”? Is that a racial slur, trav?

    As already carefully laid out by johnny, if the business doesnt issue them, they wont accept them, and anyone with the ‘bucks’ in their possession would obviously know the ‘rules’.

    It’s astounding that travelah is not in the moderated queue when he posts drunken, racist, idiotic drivelah like this…

  10. Bugg

    So travelah calls the town retarded and then mentions “raghead”s. Way to keep the conversation civil, Xpress.

  11. Bugg

    Why are my posts not appearing when I call someone a retard or a raghead? I’m just trying to be civil like travelahaha.

  12. Jon Elliston

    Travelah,

    Don’t use the term raghead to disparage people here. If you continue to we’ll have to close your comments out.

    Also, Bugg, don’t call me any more names.

    Calling a town retarded seems harmless enough. It’s not a personal attack.

    And a personal request: Can you both grow up a little so I can get some work done? Thank you.

  13. Bugg

    Jon, I am extremely grown up. I’m just following the rules of civil discourse that have been established on the Xpress website.

  14. travelah

    My apologies for referring to the odd folks as ragheads … I’ll keep that among good friends going forward. It has nothing to do with race. As for ‘tarded, well, I don’t think referring to a city as ‘tarded is a personal ad hominem. It is more a reflection of it’s regressive development.

    In the spirit of doing things in a manner that doesn’t offend Mr Buggg and pffffftst, I’ll reword …

    In this regressive town of protests for everything under the sun, it would only be a matter of time before some poor mislead soul demands that the proprietor accept his sincere monopoly money for the meal he just consumed thinking everybody should be on board with this rather novel and ineffective barter system.

  15. travelah

    Johnny, it is novel but what does it address? What is the prevailing monetary issue that would call for such a scheme? The effectiveness of any monetary system is dependent on the soundness of it’s exchange system. Somebody has to issue the notes and lacking a large risk exposure, that takes some sort of monetary exchange.

    Here is the scenario. You have a small business dependent on good quick ratios and fast liquidity. You go first and in a month, report back. I would like to be the fly on the wall in the banker’s office.

  16. Travelah, there are many issues with the current money scheme that call for a change. The mismanagement of interest rates by the Fed regularly deep-sixes the economy. The interest charged by banks for credit forces an artificially high rate of expansion on borrowing businesses, causing some to fail that didn’t need to, and other to grow faster and bigger than perhaps they should have. The debt that finances the dollar leaves us beholden to foreign interests. These are all issues that would be addresses and corrected by this proposed local currency.

  17. annica2

    johnny is right. a local currency would be a step in the right direction to combat inflation rates the federal reserve is controlling by buying bonds from the banks, setting interest rates and lending to foreign central banks and financial institutions. the best way to do this is by backing it with some commodity. a metal, food, anything with value. the banks will be working hard to fight this one. i would be very proud to live here if this proposal goes through with the commodity backing.

  18. JWTJr

    Jon (MX) – you are chastising Trav for name calling and you let “insulticon” run rampage over everyone who dares to comment.

    What’s up with that?

  19. travelah

    Johnny, what you are suggesting is not grounded in fact but in misguided perception (imo). Here is a trend of prime rates going back to 1947.
    http://mortgage-x.com/general/indexes/prime.asp
    Interest rates like everything else in a free market economy are determined by supply and demand with several checks and balances applied along the way. When those checks and balances are tinkered with along the way, the system gets sick. We saw that with the social tinkering with risk policies in an attempt to move more unqualified people into adjusted rate mortgages. The sound practices of risk management were set aside in favor of liberal policy.
    Here is an inflation trend going back to 1990.
    http://www.inflationdata.com/Inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm
    Inflation has not been a general societal problem since the Carter years.

  20. travelah

    Imagine being the artist supplier left holdng the bag of script.

  21. lance

    jon
    wouldn’t it be easier to just remove the slur?
    Travelah’s apology seems a bit disingenuous, imho

  22. Travelah, interest rates are determined by the Fed, a most anti-free-market organization. Whatever specific tinkering they may have done pales in comparison with their historical record of and capacity for even greater tinkering. What happened with the sub-prime mortgages was not a fluke- it was systematic of the system, whatever the particular reasoning behind this latest tinker. As for inflation, I was born the year Carter came into office. I have bought various things throughout the 80’s, 90’s, and the 00’s. Things cost more now than they did then. Significantly more. That’s inflation.
    And, as I have said before, the only suppliers would be the businesses themselves. Every unit of the currency would have a corresponding good or service that it was an obligation for for. No one would be left holding any bags- if worse came to worse, all remaining currency units would be traded in for merchandise, and the accounts would once again be at 0.

  23. travelah

    jon
    wouldn’t it be easier to just remove the slur?
    Travelah’s apology seems a bit disingenuous, imho

    What slur? I apologized for offending the sensibilities of two people here. I personally find nothing wrong with the term at all especially given the crap I get tossed my way here regularly however I have agreed to not use it. If you think I am insincere, just call me “traveliah”. That will give me the opportunity to pigeon hole you real good. Just look at this very thread. A guy who uses pictures for a name calls me a racist completely out of the blue and Bugg is being, well, just Buggish, it’s expected.

    Grow some skin

  24. travelah

    Why the faux concern for an issue you could obviously care less about?

    I care a good deal abut monetary issues … it is a passion and a profession.

  25. travelah

    Johnny, as soon as one significant proprietor ceases to participate, you start a pyramid chain. Now, if this is just an Asheville version of a social bridge club, well have at it but don’t try to present it as serious business.

  26. annica2

    travelah,

    interest rates have not been determined through supply and demand since the inception of the fed. the federal reserve board must make the decision to give money to banks for bonds in return, which determines the interest rate. in a supply and demand economy, demand is not banking demand for access to the public trough.

    inflation is the increase in the money supply. we are in the middle of an inflationary period right now. the rise in prices, especially for high demand, low supply goods is an effect of inflation. we saw it in the housing market and the bubble burst. we’ve seen it in gas prices. we’ve seen it in health care, education etc. those are the effects of inflation. but the rise in the cpi should not be confused with inflation, which is the increase in the money supply.

  27. lance

    Travelah:
    A slur is a slur, whether you meant it as such, whether you apologized afterwards. You can’t unring a bell, you can’t blame it on bad upbringing, ‘other people are mean’, etc.

    I love this justification: “especially given the crap I get tossed my way here regularly” – reads as “I have no self-respect, please pity me, pleeaase”

    I guess you’ll be wanting to fight now, just let me know the details, sigh.

  28. travelah

    annica, inflation is a measure of change in various price indices. It has little to do with the supply of M and everything to do with supply and demand of goods and services within certan elasticity constraints. I am sure an economist on board here could help you with this.

  29. annica2

    that could be the correct definition of price inflation. monetary inflation is inflation as we should know it, because monetary inflation is what causes all other definitions of inflation to happen.

    you have a picture of barry goldwater as your avatar. i’m sure he’d be very disappointed to know one of his supporters subscribed to keynesianism. it was keynes who first divided the definitions of inflation into several parts.

    here is a quote from goldwater himself:

    “Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States” — Sen. Barry Goldwater

    here is a good article explaining the real meaning of inflation:

    http://www.lewrockwell.com/paul/paul468.html

  30. annica2

    an economist who has helped me and one you should definitely be on board with is ludwig von mises. his definition of inflation:

    “Inflation is an increase in the quantity of money without a corresponding increase in the demand for money, i.e., for cash holdings.”

    another good article on the real definition of inflation:

    http://mises.org/story/908

  31. julie s.

    i just want to make sure people are reading the actual article (as opposed to just the tweets above), as well as the comments after the article. please do so if you haven’t yet.

  32. travelah

    I guess you’ll be wanting to fight now, just let me know the details, sigh.

    lance, there is no such desire here. Have a good day.

  33. travelah

    annica, don’t confuse me for a Keynesian nor think I reject monetary policy in combating inflation. I am simply trying to have you understand that inflation is not defined by measures of money and is instead combated through monetary policy. Mises view is of the Austrian or psychological school and my own is that of the Chicago school of economic thought. If we are in a deflationary cycle, throw money at it would be Friedman’s perspective. If we are in an inflationary environment, restrict the supply of money. The supply of money combats inflation and is not itself the cause of inflation nor it’s measurement.

  34. travelah

    Well, the Fed is currently having to manage monetary policy while balancing competing ideologies, monetary and fiscal. The Fed has been quite efficient in managing the supply of money in combating inflation. Unfortunately, wise men are not running either the Fed or Treasury. Add to that the current Democrat power regime and I expect serious trouble ahead.

  35. Travelah, its not a matter of who is in charge. The Fed is central planning, more in line -with soviet-era command economies and something purporting to be a free market. Putting financial supermen in charge won’t fix a bad system.

  36. annica2

    friedman is a monetarist. he did have great deal of influence on the chicago school. the chicago school and monetarism are still keynesianism. the chicago school is just the more conservative school of keyensianism. it still involves central banking, central planning and pumping money into the market in an attempt to get things moving around.

    to me, austrian economics is economics. it involves the diversity of the free market and how it works without central banking, central planning and authoritarianism. remember, it was the austrian economists who predicted the financial crisis we’re in right now. they predicted it first by looking at the federal reserve, and the increase in the money supply, correctly calling it inflation.

    you can’t just look at the consumer price index and be able to tell if inflation is happening. the increase in the money supply is inflation, because it eventually results in inflationary results in the cpi.

    it is both democrats and republicans who sold us out to this kind of fascism.

  37. JWTJr

    Annica2 – be prepared for the Ayn Rand comparisons. Free markets are bad … Mmmkay?

  38. travelah

    Annica, I do not know where and how you are coming up with your assumptions but Friedman’s monetarism is opposed to Keynesian policy. Friedman started out as a Kenynesian but becme disenchanted with it’s failures.

    However, consider what you are stating: inflation results in inflation. It is simply incorrect.

  39. 1clrview

    You can say that I have always lived my life a little different than many. This goes with my ideas to get business that often would be rejected due to cost of money for some of the businesses and local customers. I will tell you that I have managed to get food credit in amounts of $300.00 in food in exchange for my services to include pressurewashing/ painting. I love it! My wife always gets out of cooking and I get to save on groceries. My goal is to get all entertainment and living to be provided without a cent of money for payment to be involved. I have many success stories that have worked. Im looking to see what you guys come up with. In the mean time I will continue to get my great deals which seems to be a win win situation for me. Good luck!!!!!

  40. The Rocket Club

    This is a good idea, but I wonder how many businesses can do it, despite wanting to Harvest can buy CD’s with the proposed currency, nor can they pay their electric bills. I can’t take them to the ABC to buy whiskey, or The Bank of Asheville to pay my mortgage.

    What is asked of us then it to take some of our profit(and trust me for most small businesses profit is small) and invest it in the new system.

    If I understand this system correctly, I can promise to do do 100 monetary units worth of work at and get 100 monetary units, which I can then spend.

    It is like being asked for give someone a beer for them to sweep my sidewalks, but they want the beer now, and will do the sweeping tomorrow. Many folks would sweep, but others will not. Sounds like the system is based on trust.

    All my blathering aside, we’ll give it a try if it comes about. I’m curious.

  41. Well, it is based on obligation. Issuing the currency obligates you to accept the currency as payment. That’s because it backed by the goods and services you provide.
    Payees will (presumably) accept the currency because they know they can use it to pay for goods and services at the business that issued it, as well as at other participating businesses (there should be quite a few of them.) Issuers will issue it on the basis of the payees willingness to accept it. This ensures that both parties- payers and payees- will both accept and use the currency, making it functional.
    Now, you’re right, not every business can feasibly participate in this, but more can than you might think. Part of our plan is to (eventually) get the utilities to accept it. So, say, Harvest Records could use it to pay wages, utilities, marketing, etc. Harvest Records has a lot more overhead than CDs.
    And we’re not asking for the businesses to buy the currency. That would be counter-productive. One of the central premises of the Asheville Currency Project is that businesses have unused productivity, unused because the supply of currency was not sufficient to utilize it. We seek to correct that. We will print the currency free of charge when the businesses issue it. This gives the business more purchasing power, power to match the true worth of a business, based on the goods and services it provides.

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