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 | Regional currency Posted by Fred Bartlett on 4/14, 12:39pm | |
| Not so new, but reports are, it is catching on around the country. Fox or somebody highlighted this recently. I apologize if this has already been beat to death here in the past few years, I didn't see anything. Berkshares are a 'local' currency with a 5% discount exchange rate with 'federal dollars,' established several years ago. Similar to 'mall' currency, but more widely fungible as currency; some shopping malls offer local mall gift cards that are spendable anywhere in the mall. It seems to me mostly a tool to emphasize the fact of our 'the economies', and not 'the economy.' The intent is clearly to restrict in some fashion the reach of local economic activity to local producers and consumers, the opposite of 'globalism.' The currency is purchased at a 5% discount, and spendable locally at face value, and also exchangeable at the same rate. It is a curious phenomenon. No employee (or any debt holder) has much incentive to accept wages owed as unadjusted Berkshares, because if paid in federal dollars instead, he can walk to the bank and get the 5% discount rate and get more Berkshares, whereas if paid in Berkshares and converted to federal dollars, a 5% premium is paid, if I understand the 'exchange rate' correctly. As well, this discount rate used to be 10%, when this currency first appeared. It would seem that the main economic pressure that 'supports' the local parallel currency is local pride/parochial chauvinism, period. I understand the incentive of local vendors to claim 'We accept Berkshares' from customers, and I understand the appeal of the immediate 5% discount, but apparently they are also usable B2B as 1:1, and given a choice, one would always prefer to be paid in federal dollars. Businesses are encouraged to pay 'willing employees' in Berkshares, and provide 'change' to customers paying in federal dollars with unadjusted Berkshares. The 5% exchange discount is transacted at one of several special local banks, and that is assumed to provide enough 'drag' on the discount to inhibit small discount based transactions. What is this, really? If a local economy accepts this currency as real currency, and value for value transactions are still conducted, then it sounds almost like 'insurance' against a widespread national collapse in the banking system. Isn't it, at its essence, a local vote of no confidence, and is that the real appeal of this growing phenomenon, a local act of protest, rebellion against the increasing globalization/federalization of 'The' Economy? | ||
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