the value of money

[hughes@ah.com (Eric Hughes)]

>There have been several private-currancies in the recent past.  One of
>them was written up in Utne Reader, quoting the Whole Earth Review.

These are the LETS systems, Local Exchange Transfer Systems.  They
seem to have been most successful in places of high unemployemnt as a
way of increasing liquidity for services (mostly).

>Inflation was not a problem because the money supply
>remained at zero.

>The most telling remark from the originator (a Canadian) was that the
>system worked best when you had someone with deep pockets who was
>willing to run up a big positive balance by trading away things of
>value for the private currancy.

So it seems that the money supply, that is, the amount of liquidity
available in the system, is not zero, but something else.  There
certainly are some interesting questions here, in particular the
effective exchange rate between the national and local units of value.

Eric