Monday, June 14, 2010

Alternative Currencies

Alternative paper monies are also being used. In several communities across the nation, entrepreneurs have banded together to produce their own currencies, which operate alongside Federal Reserve Notes, but are used only locally by those willing to accept them in exchange for goods and services. Among them are Detroit Cheers, BerkShares in Massachusetts, and Ithaca Hours in New York. “The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency,” USA Today reported last year in an article entitled “Communities print their own currency to keep cash flowing.” The goal is to help local economies in bad times.

But while various routes to set up alternative currencies and expose — and eventually end — the Federal Reserve gather momentum, none of the options currently in existence would offer a viable substitute for the present system if and when it suddenly collapses. And that has one monetary expert very worried.

“We have to start looking seriously at what the practical remedy is going to be as this system comes down,” warned Edwin Vieira, a constitutional attorney and an expert in monetary theory who has litigated cases involving money issues. He compared the central bank’s effect on the economy to having square wheels on a car: “Sooner or later, you’re going to shake something loose and the car will fail. And that’s our situation, we’re driving this car with square wheels — the front end, the rear end and the transmission are about to fall out — and we’re in the middle of Death Valley. Literally!”

Vieira told The New American that “the whole present monetary system is unconstitutional,” but if the scam was exposed and the general population suddenly lost faith in its paper debt money, an economic collapse and chaos would quickly follow without a viable system ready to replace it. “This is frightening to me, because imagine one of these lawsuits [against the Fed] wins, and now it becomes absolutely clear to the general public that this operation is totally permeated, if not entirely based on fraud … the house will come down.”