11–20 of 92 posts
Is there a name for pegging a currency to a basket of goods? I can't find any examples online.
>Nick Kacher of the Schumacher Center has discussed the possibility of pegging its value to a basket of local goods in order to insulate the local economy against volatility in the US economy. Is there a name for pegging a currency to a basket of goods? I can't find any examples online.
I had a similar scheme for local based UBI here: https://qbix.com/blog/index.php/2017/09/the-future-of-money/
While not exactly an economist / finance type I would have thought the federal and state governments would have shut this down as it removes a certain level of currency control no? Can anyone explain the legalities around this?
The funny money here is stilled pegged to the US dollar, so the Fed can still exercise monetary control over it. It's really just a form of gift certificate (or scrip) from my reading of it. Anyways, there's a history of using non-USD money in the US: see company towns that only dealt in company scrip, Disney Dollars, etc. No matter what you're making money in, the government expects to be paid, and it only accepts U…
https://en.m.wikipedia.org/wiki/Greenback_(1860s_money)#Pre-...
Having said that, most of our money today is credit money in bank networks, like VISA or Paypal. In China it had a meteoric rise with WeChat etc.
My company is working on a platform that will allow ANY community to issue its own currency. And no, I don't think there is any requirement to have it pegged to the dollar.
While not exactly an economist / finance type I would have thought the federal and state governments would have shut this down as it removes a certain level of currency control no? Can anyone explain the legalities around this?
State governments are prohibited by the constitution from issuing their own currency.
Otherwise private entities are free to issue whatever currency they like. Nothing requires it to be pegged to the US dollar as far as I'm aware. You're effectively trading the "full faith and credit" of the US government for some pretty paper. Whether that pretty paper is worth something depends on whether you believe you will be able to purchase things of value with it, or in this case because banks guarantee a fixed exchange rate with the dollar.
Grew up in a town that used these (a town in berkshire county, ma); I thought they were a novelty and didn't really buy or use any (or see anyone use them). Just a single datapoint.
Note that the manufacturer of the paper used in US currency (and many others around the world), Crane, is located in the Berkshires. Hence part of the reason why the currency looks so good.
Strangely, I've never heard of BerkShares.
While not exactly an economist / finance type I would have thought the federal and state governments would have shut this down as it removes a certain level of currency control no? Can anyone explain the legalities around this?
That people assign value to these bits of paper is no differnt than bitcoin. If a bank wants to sell bitcoin, or buy them, it can. The regulations re whether a bank can call such holding an asset make thing complicated for the bank but so long as things remain small there isnt much of an issue.
It also isnt money because people can refuse to participate. An employee need not accept these in lieu of wages. A business need not accept them. Real money cannot be avoided. All debts in the US can be settled with dollars.
Note that the manufacturer of the paper used in US currency (and many others around the world), Crane, is located in the Berkshires. Hence part of the reason why the currency looks so good.
I grew up in the Berkshires and worked at Crane (making paper for the currency of several countries). Strangely, I've never heard of BerkShares.