Re: Local Currency Article

["David Spitzley" <dspitzle@gw.wash.k12.mi.us>]

>>> PBottissr@aol.com 12/09/02 11:02PM >>>
http://www.norfed.com/?REFERER=NRC74095 

This has been growing and it might be the wave of the future.
Paul R. Bottis Sr.
-------------------------------------------------------------

I've never been entirely clear why gold should be such a hot topic with
money reformers, as I consider it to be basically shiny lead; if I could
eat it, I might see the appeal.  What I'm curious about is how they deal
with divergence between the value of the currency  and the monetary
value of the gold as gold prices change.  If a $10 piece of gold scrip
is supported by $15 of gold due to price increases, do they take the $5
of gold and print a $5 bill based off it?  Given this is basically the
same method used prior to central banking, it's presumably vulnerable to
the same sorts of abuses, or at least a drift towards fractional
reserves.

Still, you have a point about the use of gold-based scrip as something
which seems to be spreading.  One of my fellow Ph.D. students was
actually listed as a contact person for purchase and redemption of one
of the currencies.  Still, it occurs to me that a counterfeiter could
have a field day creating spurious "gold-based" currency notes of a new
style and using them in areas well-penetrated by the established gold
notes.  Ironically, if they were accepted by a community as valid,
they'd be worth just as much as the authentic currencies, as the
willingness of people to accept a scrip is the only real measure of its
value.


David
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