Cyclos is a mechanism for an alternative currency. You are correct that there is no physical currency, unless you count the north and south divides on the magnetic strip of a piece of plastic card stock. Physical money in circulation is the tip of the iceberg of economic money. Almost all money is in accounts of one sort or another. I invoice you and wait on your check or Paypal addition to my account. Neither of us uses or sees actual "currency". And the amount is very large especially compared to what is in our wallets or pocket at any give time.
So what units of value have you and I exchanged. Typically the unit of value of the society we live in. But every now and then a foreign coin can appear in our change. Typically we treat it as the same value as "our" money. A Canadian quarter will be used just like a U.S. quarter and treated as if it contains the same value.
But that cannot be done at the electronic level. Well, of course it can. When in a foreign country you insert your debit card into a machine and out comes the local currency taken from your account storing your home currency with various fees and exchange rates applied.
Once a currency is established then an exchange rate system will naturally arise. The trick is getting your currency established. To do that you need a community willing to use it. There must be enough people willing to spend it and earn it. I read that the biggest problem with local currencies is that they tend to be easier to earn than to spend. We tend to want to buy physical things with our ephemeral work. And the physical things we want in this case are usually things from foreign economies, in this case the "outside" dollar economy.
But I am imagining a fractional economy. We already have merchants offering a discount to locals who possess a card that identifies them as locals. But what if instead of a discount they offered to allow you to spend some of your local currency on your purchase. 85% dollars and 15% local to buy some object. And what if as an incentive for their clerk who they pay minimum wage, they offered to pay an additional amount in the local currency. $8.50 and hour plus $1 local. You get the idea.
How does one get such a thing started. The same way as the feds do it. You loan it at cheap to zero interest. Or you give it away and tax it back. A government's roll in this is to stir economic activity, especially during a capitalist depression. A government must be prepared to inject in down times and withdraw during "inflationist" times.
Since some "we" are creating this currency then this "we" becomes the government. In this case we might do both give away a starter amount of money to everyone and loan larger amounts to others.
The simple goal is to generate economic activity locally where the federal government, the one that controls the larger economy, is mired in political gridlock and cannot follow the correct economic course of stimulus during a depression and is rather doing just the opposite of austerity which makes it worse.
There is a quite entertaining reprint a little earlier than this diary. The author finds that he makes more and more of his purchases using credit and debit cards. He goes off on an interesting spin about the consequences of the disappearance of currency. There is only one, tiny, minor quibble interfering with my enjoyment of his essay:
Currency isn't disappearing.
In fact, while currency was 30% of money (M1 -- currency, checking accounts, and money orders) in 1990, it was 50% in 2010. So the role of currency in money rose on an average of 1 point a year for 20 years.
Indeed, while the economy, as measured by (nominal) GDP, rose by a factor of 1.9 from 1990 to 2008 and the money [which goes to operate that economy] rose by the same factor, the amount of currency rose by a factor of 3.3 over the same period.
So why did my BS detector rumble so fast when I saw the earlier post? Well I had participated in an earlier online discussion. Somebody talked about "printing presses" in dealing with the increase in the money supply. I had learned that printed money was only a small fraction of the money supply, and I wanted to say that definitively. So I looked up the figures. To my surprise, the fraction at that time was much higher than it had been when I learned it.
So, the lesson for us all is to look it up.
The earlier poster would have had much less egg on his face if he had. I avoided some egg on my face by doing it on the much-earlier discussion. And I caught him by looking his figures up.
The source for these figures, and my first choice for looking all sorts of things up, is Statistical Abstract of the United States. It comes out every year, too early to have that year's figures in it. A copy is in every branch library where I've ever looked for one. I believe you can get it on-line. Any specific info is on-line in other forms, too.
(This is a repost from the Agonist. While I do mention my local ward, 48 fyi, this is not a particularly local, Illinois, article. Since none of "us" are posting anything of late, I am thinking of posting more non-"local" articles. I encourage you to do the same. (You meaning us. You are us if your post can go directly to the front page. Ask for it if you don't have it.) - Jeff Wegerson)
In a reply to Don's lament about petrodollars Tina quoted a generic CBS news writer on the slow disappearance of actual physical money. Once upon a time BCC, before credit cards, transactions were conducted with a physical representation of exchange value, money. "Even the tooth fairy dealt only in cash." Just as substantial gold was replaced by less substantial paper, so now is paper being replaced by even less substantial bits of magnetism. No pun intended.
Yesterday I attended my new alderman's community visioning meeting to create a ward-wide master plan. I went with the intention to make two pitches. The first was for a system of representing opinion by revocable delegation (here and here) and the second was for setting up our own local currency (see Cyclos here). I had gotten the notion from a Guardian article about a Greek town essentially forced to do what their government was no longer able to do, create their own currency.
Bank of England’s governor Mervyn King: “Is it possible that advances in technology will mean that (...) the world may come to resemble a pure exchange economy? Electronic transactions in real time hold out that possibility. There is no reason, in principle, why final settlements could not be carried out by the private sector without the need for clearing through the central bank. (...) There is no conceptual obstacle to the idea that two individuals engaged in a transaction could settle by a transfer of wealth from one electronic account to another in real time. (...) The same system could match demands and supplies of financial assets, determine prices and make settlements. Financial assets and real goods and services would be priced in terms of a unit of account. Final settlement could be made without any recourse to the central bank.(...) Without such a role in settlements, central banks, in their present form, would no longer exist; nor would money.”
Actually the notion has been kicking around my bran since the seventies. But the biggest stumbling block was always counterfeiting. Again quoting from the Tina find:
"Everyone thinks cash is so simple and so easy and so fast and so secure. It's NONE of those things," said author David Wolman. In his new book, "The End of Money," he argues the biggest knock against cash is that it's costly.
"It's really expensive to move it, store it, secure it, inspect it, shred it, redesign it, re-supply it, and round and round we go!" Wolman said.
Just a few years ago I would have not opened my mouth pushing for our own local currency. But now with open-source software available and the increasing functionality of merchants and professionals to receive and spend electronic money, not to mention the growing ubiquity of striped cards that hold value, well the time has come. Just imagine, if you are a Keynesian or even an MMTer (Modern Monetary Theorist), you can now put your money where your mouth is.
Not ready to give up on the dollar but hate feeding banks excessive credit card fees? Try Dwolla.
Reposted without permissions from CounterPunch ----------
A Letter to Other Occupiers
What is to be Done Next? by STAUGHTON LYND
Greetings. I write from Niles, Ohio, near Youngstown. I take part in Occupy Youngstown (OY). I was asked to make some "keynote" remarks on the occasion of OY's first public meeting on October 15, 2011. I am a member of the legal team that filed suit after our tent and burn barrel were confiscated on November 10-11. I am helping to create the OY Free University where working groups explore a variety of future projects.
I do not write to comment on recent events in Oakland. Our younger daughter lived for a few years in a co-operative house situated on the border between Berkeley and Oakland. For part of that time Martha worked at a public school in Oakland where most of the children were Hispanic. A can company wanted to take the school's recreation yard. In protest, parents courageously kept their children out of school, causing the school's public funding to drop precipitously. As I understand it, in the end the parents prevailed and got a new rec yard.
That was many years ago. It sticks in my mind as an example of the sort of activity, reaching out to the communities in which we live, that I hope Occupiers are undertaking all over the country.
Algal blooms break out in Great Lakes: 2011 was the "year of the algal bloom" in the Great Lakes. Lake Erie suffered the worst toxic algal bloom in recorded history last summer. The algae extended miles along the shoreline and miles out into the water, in places over 6 inches thick. It shut down beaches and fishing and caused respiratory problems for charter boat captains trying to cross the blooms into clearer waters.Algae (some toxic) also broke out in blooms in other lakes, including Huron's Saginaw Bay and the eastern shore of Lake Michigan up to Sleeping Bear Dunes.
and
The toxic algae, mycrosystis, has been measured at levels 1,000 times higher than WHO guidelines for drinking water; this algae can cause sickness or even death in humans and animals.
It's a world where no state has truly progressive taxation when comparing the rates between the top 15 and the bottom 20%. It's a world where South Carolina is about as bad as Vermont, where Utah and Mississippi are median and Texas is about as bad as New Hampshire.
Activist organizer Sandra Verthein is throwing her backing behind Rick Munoz for Chicago City Clerk. In an email sent to her own supporters she says:
It's time to bring reform, transparency and accountability to the Clerk's office!
Independent Democratic Alderman Rick Munoz is running against incumbent Dorothy Brown for Clerk of the Circuit Court of Cook County. This is an office that desperately needs reform -- together we can make that happen!
See the full email after the jump.
Verthein was instrumental in the creation of Northside Democracy for America and of late has been active in promoting Independent Voters of Illinois - Independent Precinct Organization (IVI-IPO). These two progressive organizations have been among the most active progressive organizations in the Illinois and Chicago electoral arena. These are in addition to the personal organizations of some progressive office holders.
(Sorry about the lack of specifics in this boiler plate press release. But that's the way the rhetoric bounces. It would have been nice if they had indicated which aldermen made an effort and specifically what was removed and what was left. - Jeff W. )
Joint statement by Coalition Against NATO/G8 War & Poverty Agenda (CANG8) and Occupy Chicago
At 12:30 today, Rahm Emanuel officiated over the death of the Bill of Rights in the City Council chambers.
Ordinances designed to severely restrict First Amendment rights of speech and assembly were presented on December 14th. The stated target was to prepare to repress protestors during the summits of NATO and the G8.
At first, aldermen and the media all agreed that no one would oppose Emanuel on this.
In response to mayor's attack on civil liberties, the Coalition Against NATO/G8 War & Poverty Agenda (CANG8) joined together with Occupy Chicago and several unions to unite our efforts to defend of civil liberties in Chicago. By last week, aldermen had felt so much pressure from constituents that they had to speak out.
Emanuel then moved to withdraw first one, and then another, of the most criticized pieces. Protests continued to grow; Emanuel retreated further; the protests mounted, and he retreated even further.
Finally, a version was reached that the council opposition could vote for, hoping that the movement would not condemn them. The final version is still a significant attack on democratic rights; its passage is a defeat for our movement.
The mayor has not achieved his true objective, though. Emanuel looks at the new Chicago he has inherited, with protestors in so many places, and he wants to put the genie back in the bottle. It's not possible.
We have the right to protest against war, austerity, and inequality. Mayor Emanuel, you'll see us in the streets of Chicago: our streets.
It's not often that we find ourselves on the same side as our Republican Senator and on the opposite side of our Democratic one. Of course the atmospherics work better for the Republicans. When one characterizes it as Hollywood versus Silicon Valley Entrepreneurs, that works well for them. But for the Democrats it might appear as Hollywood versus hippies. Oops.
At the moment I am no more a fan of mass protests than I am of electoral politics. Neither particularly effect change. For either to work you need to get a lot of people on the same page. If that work gets done then actually both can work quite effectively.
So perhaps I should amend my first statement. I do not see sufficient upfront organizing by either protest movements or progressive electoral movements to effect change by the either the protest tactic or the election tactic.
From CANG8 Press Release:
CHICAGO, January 12: Activists with the Coalition Against the NATO and G8 War & Poverty Agenda (CANG8) this afternoon received a permit from the City of Chicago for a Saturday, May 19 march from Daley Plaza to McCormick Place, site of the NATO / G8 summits to be held May 19-21.
"The issuance of this permit shows that the current ordinances, while not perfect, are more than adequate for large public events in our city, and that the Mayor should rescind his proposed anti-protester ordinances," said Andy Thayer of CANG8. "These proposed ordinance changes have been roundly condemned by all civil liberties experts who have reviewed them. The time to withdraw them is now."
The cover letter from the City accompanying the CANG8 permit contains a disturbing "escape clause," which reads, "In the event [that] the Secret Service designates specific security zones or areas that impact your route, please note that the Chicago Department of Transportation will work with you to find an alternate route for your event."
"We reject the notion that the Secret Service should reject permits that have already been approved," said Thayer. The feds have had at least six months to study the security issues surrounding the summits. In the event that they attempt to make large sections of the city inaccessible, we demand that the City insist that the protests proceed unimpeded and unmolested. Anything less would be hypocrisy on the Mayor's part."
The City Council is scheduled to vote on Emanuel's ordinance changes at its meeting on Wednesday, January 18. Two City Council committees are scheduled to discuss the changes on Tuesday, January 17 - the Committee on Budget and Government Operations at 10 AM in the 2nd floor City Council chambers, and the Committee on Special Events, Cultural Affairs and Recreation at 1 PM in Room 201A.
An organization I belong to has hundreds of members. During a recent general membership meeting, one of them stood up and pitched the idea that the group should be selling his brand of electricity to the rest of us as a fundraiser.
The board of directors asked him to confirm whether his is a multi-level marketing venture. The response: “You say that like it’s a bad thing.”
Thus the retail electricity market in the era of “unbundling” the costs of energy supply from those of delivery suddenly appeared to take on a somewhat pyramidal shape. The meeting incident plus my own community’s pursuit of a municipal energy aggregation program prompted me to investigate these developments more closely.
In the famous Star Trek episode The Trouble with Tribbles, the crew of the Enterprise finds itself in danger of being swamped by the incredible growth rate of what at first appeared to be adorable little creatures. Tribbles are an apt metaphor for employee pension systems that threaten to consume so much of an employer budget that the fundamental mission of the employing unit is imperiled.
On the surface, no one except a grinch could begrudge a generous pension, just as only the sour and malevolent Klingons disliked tribbles. Wouldn't we all like to retire in fuzzy comfort? The problem with pensions lies in growth rates.
The following is a non-ideological look at how and why defined benefit systems have been cratering under their own weight and would do so even if all contributions had been made. In particular, defined benefit plans with the payout levels now seen in Illinois and many other jurisdictions are only sustainable if high levels of return on invested funds are achieved. To assume such rates, however, is to disregard sound, conservative planning principles in favor of wishful thinking.
The following gets a little wonky and requires a graphic aid. The spreadsheet below, seen here as a JPG and downloadable as an Excel file if you click here, illustrates the built-in tribble-like problem. The spreadsheet uses a simple example of a 1-person pension plan, looking at just one employee's contributions and withdrawals. Bear in mind that the results would hold for a 100- or 1000-person plan. As I discuss in detail below the fold, what the math reveals is the workings of a fiscal time bomb.
