Local Currency Plan

[Supermanpolitician]

Supermanpolitican,

I really do not know what to say.

You still have not answered my question though.

John goes into a bank and asks for a loan of 1000 Euro. The bank gives him a loan and credits 1000 Euro into John's account. Does the bank debit the 1000 Euro from another account in the bank or not? it is incredibly simple. You either know it or you do not.

If you do not understand how money creation and fractional reserve banking works, check out these wikipedia pages.

Money creation - Wikipedia, the free encyclopedia

Fractional-reserve banking - Wikipedia, the free encyclopedia

Economics - Google Books

Does any of this ring a bell? !

Sorry there kiddo. I don't spend all of my time on P.ie as I have to do this amazing thing called work.

No I have not studied fractional reserve banking. As stated I had to google who Niall Ferguson was, and even though you said he teaches it to all first years, I subsequently found out that he lectures in Harvard. Furthermore having graduated in 1997 and 1998,I had long left college before he published his theories. Also I did not study banking in university but have studied it in the QFA and it is not part of that.

Not only that I am pretty sure that you a: have not been to Harvard either and b: do not work in the financial services industry.

Now back to the questions which you will not answer. Why would aperson who uses their work or business to earn money accept to be paid in a local currency which they cannot spend beyond a very local a limited way?

You mention about paying for groceries, but why would a grocer accept such payment? What if he wants to pay for health insurance, life assurance, an MRI, etc? What about folks passing through the village or town where this currency is in circulation. Would they have to go to the bank and get foreign exchange just to buy a Mars bar?

How would the grocer pay his suppliers who presumably need to pay their suppliers in real money?


So here's the very basic, logical and normal point which I made earlier and which you seem to dispute. Your local currency idea is farcical.

Feel free to answer any questions, especially about accepting local currency when one might need real currency.

[sandar]

cap[italism was foudned when local currencies and tarrifs ended. it would be a monumental step backwards

[Supermanpolitician]

cap[italism was foudned when local currencies and tarrifs ended. it would be a monumental step backwards

True. Local currencies died out with the need for a standard measure of value. Hence the gold standard was introduced as a way for currencies to be valued against each other.

[Kensington]

I had long left college before he published his theories. Also I did not study banking in university but have studied it in the QFA and it is not part of that.

Fractional reserve banking is not Niall Ferguson's 'theory'. It has, as far as i am aware, been know of since at least as early as the 16th century.

Also, one does not have to have went to Harvard or work in a bank to know of the fractional reserve banking system. In fact, it was, i until now thought, common knowledge among those who even took a passing interest in the economy. like the stock market and the consumer price index.

Why would aperson who uses their work or business to earn money accept to be paid in a local currency which they cannot spend beyond a very local a limited way?

Because they could use it to pay for local taxes and charges; and for local goods and services. Also, most small businesses are barely on their feet and have to pay crippling local rates. If they had a choice of not making a sale or accepting a local currency. I think they would go with the latter.

What if he wants to pay for health insurance, life assurance, an MRI, etc? What about folks passing through the village or town where this currency is in circulation. Would they have to go to the bank and get foreign exchange just to buy a Mars bar?

They would, i assume, use the national currency as they so now.

How would the grocer pay his suppliers who presumably need to pay their suppliers in real money?

Firstly, hopefully this would encourage him to source local suppliers, but he would continue to pay other suppliers with the national currency.

Feel free to answer any questions, especially about accepting local currency when one might need real currency.

If someone offered you a choice between local currency and national currency, one would probably accept the national currency. If someone, however, offered you local currency or no sale, you would probably accept the local currency.

If you were a shopkeeper and found that alot of people were offering you local currency, you may look to source your goods locally and purchase them with the local currency.

[Kensington]

cap[italism was foudned when local currencies and tarrifs ended. it would be a monumental step backwards

Well, if one lived in Asia, Africa, Central or South America, one might look at it in the exact opposite way.

Also, what local currencies were abolished hen capitalism was founded?

[Supermanpolitician]

Fractional reserve banking is not Niall Ferguson's 'theory'. It has, as far as i am aware, been know of since at least as early as the 16th century.

Also, one does not have to have went to Harvard or work in a bank to know of the fractional reserve banking system. In fact, it was, i until now thought, common knowledge among those who even took a passing interest in the economy. like the stock market and the consumer price index.



Because they could use it to pay for local taxes and charges; and for local goods and services. Also, most small businesses are barely on their feet and have to pay crippling local rates. If they had a choice of not making a sale or accepting a local currency. I think they would go with the latter.



They would, i assume, use the national currency as they so now.



Firstly, hopefully this would encourage him to source local suppliers, but he would continue to pay other suppliers with the national currency.



If someone offered you a choice between local currency and national currency, one would probably accept the national currency. If someone, however, offered you local currency or no sale, you would probably accept the local currency.

If you were a shopkeeper and found that alot of people were offering you local currency, you may look to source your goods locally and purchase them with the local currency.

So you're a green grocer in a local area. You get offered local currency for your products. You then go to your suppliers and offer them local currency. However the man selling you bananas doesn't want it. The man selling you avocados doesn't want it. The man selling you strawberries doesn't want it. The man selling you tomataoes doesn't want but you can source tomataoes at another supplier because they can be grown locally. However the other supplier won't accept it because he wants to be paid so he can pay his creditors,his farm works etc.

And we haven't even come closetomorecomplex products like Life assurance, health services, processed foods. You seem to be arguing that your idea would be great if we all lived in the stone age.

Face facts: Your idea of a local currency is utter balderdash!

[Kensington]

However the man selling you bananas doesn't want it. The man selling you avocados doesn't want it. The man selling you strawberries doesn't want it.

Well, if you want these items, you better have the national currency to buy them or you cannot get them.

The man selling you tomataoes doesn't want but you can source tomataoes at another supplier because they can be grown locally.

So, you have just found an advantage of introducing a debt-free local currency to augment the money supply. The greengrocer can now use this local currency to buy his tomatoes and used the national currency he saved to pay for something else.

However the other supplier won't accept it because he wants to be paid so he can pay his creditors,his farm works etc.

Well he better have a good business plan than and get enough national currency to pay all these guys - very hard in the modern environment. But, if he can source, lets say 20% of his supplies with the local currency, he will have a bit extra national currency to do it.

You seem to be arguing that your idea would be great if we all lived in the stone age.

So buying apples from spain in a plastic container and carrots in a can is the 21st century, but Apples from local orchards and whole carrots from a local farm is the stone age?

Face facts: Your idea of a local currency is utter balderdash!

I would if it were a fact.

[Supermanpolitician]

Well, if you want these items, you better have the national currency to buy them or you cannot get them.



So, you have just found an advantage of introducing a debt-free local currency to augment the money supply. The greengrocer can now use this local currency to buy his tomatoes and used the national currency he saved to pay for something else.



Well he better have a good business plan than and get enough national currency to pay all these guys - very hard in the modern environment. But, if he can source, lets say 20% of his supplies with the local currency, he will have a bit extra national currency to do it.



So buying apples from spain in a plastic container and carrots in a can is the 21st century, but Apples from local orchards and whole carrots from a local farm is the stone age?


I would if it were a fact.

What are you on? Why would anybody want to buy carrots in a can when they can buy fresh carrotts? That doesn't even beging to make any sense.

So you think that local farmers would want to be paid in local currency, even though this would force them to shop locally or exchange their money in the bank everytime they need to pay their workers who live ten miles down the road?

Sweet lord this is like trying to teach latin to a pig.

In one breath you are saying they have a choice of being paid in local currency or real money, but in the otehr you are saying that locals would want to be paid in local currency as it can be spent locally, even though real money can be spent locally as well.

Your argument is utter lunacy. It would only work in some bizarre medievil village cut off from all other society.

And please explain what carrots in cans has to do with this????

[Supermanpolitician]

Well, if you want these items, you better have the national currency to buy them or you cannot get them.



So, you have just found an advantage of introducing a debt-free local currency to augment the money supply. The greengrocer can now use this local currency to buy his tomatoes and used the national currency he saved to pay for something else.



Well he better have a good business plan than and get enough national currency to pay all these guys - very hard in the modern environment. But, if he can source, lets say 20% of his supplies with the local currency, he will have a bit extra national currency to do it.



So buying apples from spain in a plastic container and carrots in a can is the 21st century, but Apples from local orchards and whole carrots from a local farm is the stone age?



I would if it were a fact.

No part of your reply makes any sense at all!

[Supermanpolitician]

[ame=http://www.youtube.com/watch?v=zOGAAlHzF4o]YouTube - Tubbs And Edward - League of Gentlemen[/ame]

Think I found the situation where your local currency suggestion might work.