Here is the link to the story: http://www.bbc.co.uk/news/world-europe-17680904
Evidently, people can buy TEMs, which are supposedly equivalent to EUROS. They can purchase these by offering their services or goods in the local city market.
It sounds good. But what are your thoughts. I would like to have a discussion on this.
First, I'm all for alternative currencies. However, to set the exchange rate as one TEM to one EURO is asking for problems in my opinion. Currencies must be able to fluctuate in value in relation to one another. We say this problem even with gold and silver when it they were artificially set at a 1/16 ratio.
Second, what exactly is a TEM? Is it 1/35th of an ounce of gold like the dollar before 1971? Obviously it isn't. But if it is just like a fiat currency, what is being acheived?
Third, is there anyway to create a currency that is not in someway, indirect exchange, as Austrian economists would call it? And if we are dealing with indirect exchange, are we not dealing with some commodity that has been raised to the level of money, as has been the case with gold and silver in the past. In that case, what is a TEM? A certain weight in apples?
Fourth, could Volos Greece, use silver or gold as their new currency? Maybe a TEM could be defined as 1/1000 an ounce of gold so it is a practical sum. And then you could buy a thousand TEMs with a one ounce bullion coin, and be given change in form of electronic credit after your first purchase in the food market downtown. But if the system is to work, you would have to be able to cash out if you had a minimum of 1000 TEM...and get a one ounce piece.
I would like to do some online group thinking on this. I find it a fascinating subject buy am afraid if it isn't set up right for the people in Volos Greece or elsewhere, it will invite fraud and disappointment.
Just a few thoughts as I was contemplating starting a Local Currency a few times... In Australia there are several systems that use acronym LETS (Local Exchange Trade System), I have never been part of one but here is what I know so far:
1/ Setting an exchange rate is irrelevant - it would only open the system to corruption and specualtion that money brings with it.
2/ Value can be set, and can be agreed, and set by definition - usually it is something like half an hour of labour so everyone can relate to it. It also brings in inflation - as you get old if I hold half an hour of your labnour you might not be able to dig my potatoes as fast :-) So spending fast is encouraged as opposed to hoarding!
3/ Indirect exchange - nice idea, not sure how that can be implemented
4/ Yes, they could back it up, but that would need a large investor. I'm sure Bill Gates and Warren Buffett have that in mind as one of their charitable prusuits, but maybe not :-)