How to beat the coming depression

[gutteck]

The problem will be that there will be NO MONEY. So instead of discussing why there will be no money I thought of a solution for small communities:

All we need is MONEY and things would work. So think of this for a moment. What if small communities printed their own money? I mean, local communities can print their own money and begin trading locally. How would this work? Here is what I thought…

Let’s say that a few hundred bills were printed. For the bills to have value the community gathers things of value, let’s says whatever gold, silver or anything of value and deposits them in a safe place. Every person gets an amount of bills correspondent to the amount of valuable things they have deposited.

Severe usury laws have to be implemented locally, so that no smart ass usurer begins fractional lending or hoarding bills.



Add your contributions to the idea.

 

[rancher89]

I've posted this here before.................

Great grandmother's advice to my mother about the Great Depression, with my addendum:

Those who went through it with the least impact on their daily lives, meaning the ordinary folks of course, did three things--

1. No unsecured debt--i.e. credit cards today

2. The ability and opportunity to grow their own food and the knowledge and ability to store and keep this food.

3. The willingness to take on cash paying, or bartering, lodgers

Of course today we face another facet of the depression prism---a government that salivates at the prospect of taking away any and all freedoms at the slightest chance. Thus my addendum:

4. The ability to defend one's home and self from the government and/or marauders.

 

[Danke]

1. No unsecured debt--i.e. credit cards today

I would think secured debt would be a bigger enemy.


unsecured debt is fairly easy to walk away from, especially if the economy collapses.

 

[rancher89]

Nope, the banks don't really want your house if TSHTF, they don't need it and a million others, you just demonstrate that you are willing to work out terms and get a restructured deal. You may be able to put off mortgage payments for a while. It helps if your credit score up to the crash was stellar or at least great.

The unsecured debt (read credit card companies) will double and triple their interest rates trying to catch up with their losses from those who walk away from their debt. I'm assuming that we are upstanding citizens that don't do that (at least my great grandmother thought in those terms.) That means that you would never catch up. It might make it harder to keep your house. I

It's better to have as little debt as possible, of any type, my choice has been to pay off the g-aweful credit card bills that I accumulated trying to divorce my ex and the credit card debt my now husband accumulated not knowing any better. We're almost there. As soon as the last card is paid off, the truck gets paid off. Then we start on double payments on the house. That's just using the interest rate of the loan as an idicator of what should be paid off first if nothing else.

 

[KCandler]

The problem will be that there will be NO MONEY...
...
...
...All we need is MONEY

What about the Amero?

 

[hope7134]

Small communities across the USA are already doing that and they are flourishing. Google: bartering systems usa

Remember the liberty dollar is a bartering system

When the dollar collapses (officiially), that will be a great time to chuck Washington's control of the money (ie. Federal Reserve), but in order to do that, Americans must be awake. If not the Feds will take adavantage and this country's sovereignty will be gone.

Please read this piece by Ron Paul:
http://www.campaignforliberty.com/blog/?p=115

I've printed it off and handing it out to everyone I meet, (especially at the gas pumps).

 

[Truth Warrior]

Drugs, definitely.

 

[gutteck]

Let me explain a little further what I meant.

Examples are always the best way to explain things so:

Let’s say the country is already in the depression, the money supply has been reduced by 60% or more and the country is suffering.

In a small community somewhere out there we find a variety of people, from a few farmers, to the local doctor, a few shops and lots of unemployed people. During this depression the goods at the shops are not being sold, the farmers can’t get their crops bought, there is no commerce, all because the is no money around.

So to solve the problem the town decides in a town meeting to print their own money to allow trade. Everybody sings a document in which they compromise to accept the town notes as payment. Also to give the town notes value every person gives whatever gold and silver they posses, from which they receive town notes equivalent in purchasing power to whatever they have deposited. This would allow trading to begin.

Also the Major decided to employ people and puts everybody to work in farms and construction projects and the local government pays them with town notes.

In a matter of weeks, prosperity would rein in this town.


//

 

[buffalokid777]

Let me explain a little further what I meant.

Examples are always the best way to explain things so:

Let’s say the country is already in the depression, the money supply has been reduced by 60% or more and the country is suffering.

In a small community somewhere out there we find a variety of people, from a few farmers, to the local doctor, a few shops and lots of unemployed people. During this depression the goods at the shops are not being sold, the farmers can’t get their crops bought, there is no commerce, all because the is no money around.

So to solve the problem the town decides in a town meeting to print their own money to allow trade. Everybody sings a document in which they compromise to accept the town notes as payment. Also to give the town notes value every person gives whatever gold and silver they posses, from which they receive town notes equivalent in purchasing power to whatever they have deposited. This would allow trading to begin.

Also the Major decided to employ people and puts everybody to work in farms and construction projects and the local government pays them with town notes.

In a matter of weeks, prosperity would rein in this town.


//

I don't think the problem will be no money.....it will be too MUCH money chasing too FEW goods.....

Look at the reserves of dollars held by central banks around the world.......There is plenty of money (Too much money) as denominated in US Currency Federal Reserve notes......

 

[Acala]

too MUCH money

Let me explain a little further what I meant.

Examples are always the best way to explain things so:

Let’s say the country is already in the depression, the money supply has been reduced by 60% or more and the country is suffering.

In a small community somewhere out there we find a variety of people, from a few farmers, to the local doctor, a few shops and lots of unemployed people. During this depression the goods at the shops are not being sold, the farmers can’t get their crops bought, there is no commerce, all because the is no money around.

So to solve the problem the town decides in a town meeting to print their own money to allow trade. Everybody sings a document in which they compromise to accept the town notes as payment. Also to give the town notes value every person gives whatever gold and silver they posses, from which they receive town notes equivalent in purchasing power to whatever they have deposited. This would allow trading to begin.

Also the Major decided to employ people and puts everybody to work in farms and construction projects and the local government pays them with town notes.

In a matter of weeks, prosperity would rein in this town.


//

I believe too MUCH money will be the problem, not too little money.

But let's assume you are correct.

If the people had gold and silver, why would they bother giving it to yet another government to print more paper money? Why not just use the gold and silver? And if the government were going to accept commodities other than gold and silver in exchange for the notes, how would they value the notes? Would they set exchange rates for wheat and eggs and gold and leather and every other thing people might want to exchange for the notes? It would mount to a massive price control scheme.

 

[gutteck]

I believe too MUCH money will be the problem, not too little money.

But let's assume you are correct.

If the people had gold and silver, why would they bother giving it to yet another government to print more paper money? Why not just use the gold and silver? And if the government were going to accept commodities other than gold and silver in exchange for the notes, how would they value the notes? Would they set exchange rates for wheat and eggs and gold and leather and every other thing people might want to exchange for the notes? It would mount to a massive price control scheme.

Too much money, too little money, what difference does it make? The purchasing power is the same.
Also the gold and silver will be used to back the initial notes. After that labor will back the local currency.

And writing a list of prices according to the amount of gold a note can buy is not that hard to make. For example if 100 town notes buy 1 ounce of gold then just go from there and set the prices for other goods. Don’t make thing complicated when they are not.

 

[micahnelson]

Too much money, too little money, what difference does it make? The purchasing power is the same.
Also the gold and silver will be used to back the initial notes. After that labor will back the local currency.

And writing a list of prices according to the amount of gold a note can buy is not that hard to make. For example if 100 town notes buy 1 ounce of gold then just go from there and set the prices for other goods. Don’t make thing complicated when they are not.

Youre kind of forming a central bank there aren't you? People wouldn't need to sign something to force them to accept a good currency- only a bad one.

Start with barter, let a few banks pop up. Limitations should be on banks, not on citizens- therefore 100% reserve becomes law of the land to protect property rights. Make fractional reserve banking classified as what it is, counterfeiting and fraud.

I do understand the increase in development and growth that Fractional reserve banking provides- but I also understand that you can't make it last forever. Whatever bump you got at the time will snap back at you later.

 

[gutteck]

Youre kind of forming a central bank there aren't you? People wouldn't need to sign something to force them to accept a good currency- only a bad one.

Start with barter, let a few banks pop up. Limitations should be on banks, not on citizens- therefore 100% reserve becomes law of the land to protect property rights. Make fractional reserve banking classified as what it is, counterfeiting and fraud.

I do understand the increase in development and growth that Fractional reserve banking provides- but I also understand that you can't make it last forever. Whatever bump you got at the time will snap back at you later.

Banks are dangerous.

The idea is to do this in small communities with the local government issuing the notes. Not the banks, not private parties but the local government.

Also one thing you are forgetting is that the money being issued – hypodermically, is DEBT FREE. So the local government does not need to tax the people to pay NO ONE.

Also a battering system, while it could be an option, it is not practical and would not have the same results.

And after what is going to happen, I don’t think that people would like to have “banks popping up” anywhere near them…

 

[micahnelson]

Banks are dangerous.

The idea is to do this in small communities with the local government issuing the notes. Not the banks, not private parties but the local government.

Also one thing you are forgetting is that the money being issued – hypodermically, is DEBT FREE. So the local government does not need to tax the people to pay NO ONE.

Also a battering system, while it could be an option, it is not practical and would not have the same results.

And after what is going to happen, I don’t think that people would like to have “banks popping up” anywhere near them…

It certainly has benefits over our current system. It isn't going to take the local government very long to realize they can just print notes, though. Its like the fiat money produced by the Mass. Bay colony. I would say scrap the obligation to use the currency and it would be fine. People could choose to use or not use it.

In fact, this system is in place in some communities already...

http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States

 

[123tim]

The problem will be that there will be NO MONEY. So instead of discussing why there will be no money I thought of a solution for small communities:

All we need is MONEY and things would work. So think of this for a moment. What if small communities printed their own money? I mean, local communities can print their own money and begin trading locally. How would this work? Here is what I thought…

Let’s say that a few hundred bills were printed. For the bills to have value the community gathers things of value, let’s says whatever gold, silver or anything of value and deposits them in a safe place. Every person gets an amount of bills correspondent to the amount of valuable things they have deposited.

Severe usury laws have to be implemented locally, so that no smart ass usurer begins fractional lending or hoarding bills.



Add your contributions to the idea.

This was actually done by one community during the Great Depression. I briefly looked for a reference, but don't have time to dig it up right now. I posted this last fall, but it will take some time to find it.

I can tell you these three things about the "experiment" off the top of my head:

1.) It worked very well.

2.) Jobs and prosperity started to flourish.

3.) The government squashed it and the entire community returned to the depression.


I'll search for this later. Does anyone know what I'm referring to?

 

[123tim]

This was actually done by one community during the Great Depression. I briefly looked for a reference, but don't have time to dig it up right now. I posted this last fall, but it will take some time to find it.

I can tell you these three things about the "experiment" off the top of my head:

1.) It worked very well.

2.) Jobs and prosperity started to flourish.

3.) The government squashed it and the entire community returned to the depression.


I'll search for this later. Does anyone know what I'm referring to?

Found it. I was wrong about the government ending it...It was a Bank system which caused it's demise. It happened in Austria, in the town of Worgol:

" There was a time when people were so convinced that the earth was flat, that the idea that it was round was inconceivable.

Likewise today, the idea of a community or region issuing and using its own currency and running its own bank may seem just inconceivable.

But it has happened.

The Worgl Schillings

In the early 1930s the small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency.

Its burgomaster, Michael Unterguggenberger, faced an empty treasury, because the unemployed citizens could not pay their taxes; roads and bridges needed repair and parks needed maintenance, for which the town could not pay; and idle men and women earned no wages.

He recognised that all three problems could be solved if he could find the connecting link.

That link was money. The three problems coexisted because no one had any of it, and his simple solution was to create money locally.

He issued numbered 'labour certificates' to the value of 32,000 schillings, in denominations of 1, 5 and 10 schillings, respectively. These became valid only after being stamped at the town hall, and depreciated monthly by 1 per cent of their nominal value.

It was possible for the holders to 'revalue' them by the purchase, before the end of each month, of stamps from the town hall, in the process creating a relief fund.


'The small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency'

Because it was a depreciating currency, it circulated with rapidity, boosting the local economy. Also, not only did people merely pay their current taxes in the currency, but also discharged their tax arrears. Further, many paid their taxes in advance because it was financially advantageous.

Apart from the obvious employment benefits, physical assets were created. These included improvements in the main street and its drainage system, street lighting, new road construction, manufacturing of kerb stones and drainage pipes, construction of a ski-jumping platform, and fencing and construction of a new water reservoir.

Although the Worgl money was unanimously accepted at the local level, there was great opposition from two centralist forces - the Tyrol Labour Party and the Austrian State Bank.

In both cases, there seemed to be the fear of the experiment spreading, for the idea was copied by the neighbouring town of Kirchbichel. The town monies were valid in both places. Other towns in the Tyrol also decided on issuing depreciating money, but did not proceed because of threats from the State Bank.

The experiment curtailed

Ultimately, the State Bank threatened legal proceedings and on September 1st 1933, the experiment was terminated......"



The rest of the story is found here:http://www.globalideasbank.org/site/bank/idea.php?ideaId=904

 

[Acala]

How?

Too much money, too little money, what difference does it make? The purchasing power is the same.
Also the gold and silver will be used to back the initial notes. After that labor will back the local currency.

And writing a list of prices according to the amount of gold a note can buy is not that hard to make. For example if 100 town notes buy 1 ounce of gold then just go from there and set the prices for other goods. Don’t make thing complicated when they are not.

How does labor back the currency? Backing currency means that there is a finite asset of some kind held in reserve somewhere such that an amount of the asset specified on the note can be had in exchange for the note. So will the note say "redeemable for one hour hard labor from Joe Smith" and then when presented with the note Joe Smith will have to go work for an hour? No thanks.

If a central authority sets a price for each commodity, then guess what? You now have government-mandated price controls with all the horrors of shortages and surpluses that go with it.

Any system that sets any relative prices of goods and services is going to be a falure. Even setting the relative price of gold versus silver creates problems.

You need to let the market set the exchange value of all goods and services including money.

 

[mediahasyou]

How to beat the coming depression

http://www.amazon.com/Crash-Proof-Economic-Collapse-Sonberg/dp/0470043601

 

[gutteck]

How does labor back the currency? Backing currency means that there is a finite asset of some kind held in reserve somewhere such that an amount of the asset specified on the note can be had in exchange for the note. So will the note say "redeemable for one hour hard labor from Joe Smith" and then when presented with the note Joe Smith will have to go work for an hour? No thanks.

If a central authority sets a price for each commodity, then guess what? You now have government-mandated price controls with all the horrors of shortages and surpluses that go with it.

Any system that sets any relative prices of goods and services is going to be a falure. Even setting the relative price of gold versus silver creates problems.

You need to let the market set the exchange value of all goods and services including money.

I am forming the idea, so it is good that you point out these things.

Backing a currency with labor, in the sense that someone has to work and create real wealth to get paid is not novel. It has been used many times successfully.

And yes, I agree with you that the government should not set the prices for food and things like that. What I meant before is an INITIAL list of prices to get the money moving. How can the people know how much to pay for things in the beginning?

 

[gutteck]

Found it. I was wrong about the government ending it...It was a Bank system which caused it's demise. It happened in Austria, in the town of Worgol:

" There was a time when people were so convinced that the earth was flat, that the idea that it was round was inconceivable.

Likewise today, the idea of a community or region issuing and using its own currency and running its own bank may seem just inconceivable.

But it has happened.

The Worgl Schillings

In the early 1930s the small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency.

Its burgomaster, Michael Unterguggenberger, faced an empty treasury, because the unemployed citizens could not pay their taxes; roads and bridges needed repair and parks needed maintenance, for which the town could not pay; and idle men and women earned no wages.

He recognised that all three problems could be solved if he could find the connecting link.

That link was money. The three problems coexisted because no one had any of it, and his simple solution was to create money locally.

He issued numbered 'labour certificates' to the value of 32,000 schillings, in denominations of 1, 5 and 10 schillings, respectively. These became valid only after being stamped at the town hall, and depreciated monthly by 1 per cent of their nominal value.

It was possible for the holders to 'revalue' them by the purchase, before the end of each month, of stamps from the town hall, in the process creating a relief fund.


'The small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency'

Because it was a depreciating currency, it circulated with rapidity, boosting the local economy. Also, not only did people merely pay their current taxes in the currency, but also discharged their tax arrears. Further, many paid their taxes in advance because it was financially advantageous.

Apart from the obvious employment benefits, physical assets were created. These included improvements in the main street and its drainage system, street lighting, new road construction, manufacturing of kerb stones and drainage pipes, construction of a ski-jumping platform, and fencing and construction of a new water reservoir.

Although the Worgl money was unanimously accepted at the local level, there was great opposition from two centralist forces - the Tyrol Labour Party and the Austrian State Bank.

In both cases, there seemed to be the fear of the experiment spreading, for the idea was copied by the neighbouring town of Kirchbichel. The town monies were valid in both places. Other towns in the Tyrol also decided on issuing depreciating money, but did not proceed because of threats from the State Bank.

The experiment curtailed

Ultimately, the State Bank threatened legal proceedings and on September 1st 1933, the experiment was terminated......"



The rest of the story is found here:http://www.globalideasbank.org/site/bank/idea.php?ideaId=904

Wonderful!

I’ll try to do some more research, that is, if the banks had left more information than what you have found.