English City of Bristol Launches its Own Local Currency

In what is an extremely positive development, the English city of Bristol has created its own local currency.  It is called the Bristol Pound and it came into official existence for trade yesterday at 12:11pm local time.  This just further solidifies what I believe is an irreversible trend toward decentralization of money away from banking cabals and corrupt government’s globally.  No matter how you wish to express your contempt for crooked government/Central Bank currencies does not matter.  What matters is that you do it.  So go out and exchange your fiat for physical gold and silver, utilize Bitcoins in your business, or go out and create your own local currency.  It is by taking action on the corrupt money system that we will regain our dignity, freedom and free markets.  Alternative currencies, no matter what they may be, represent the wooden stake in the heart of financial vampires.

Personally, one thing that I am experimenting with is accepting Bitcoin donations through my website (see the menu tab below the main picture) to familiarize myself with the system.  I also wrote a related article on the subject recently titled Bitcoin: A Way to Fight Back Against the Financial Terrorists?

Interestingly, ever since I started launching the remodeled website about three weeks ago, Bitcoin has surged in value by 25% from about $10 per Bitcoin to $12.50 at the moment.  Not to say those gains will continue, but it is interesting nonetheless.

Anyway, without further ado, here are some excerpts about the Bristol Pound from the UK’s Telegraph:

Creators of the Bristol Pound claim that a local currency has the potential to significantly increase the amount of spending power in the region and ensure that it is channelled into local, independent businesses.

Ciaran Mundy, co-founder of the Bristol Pound, told AFP last month: “Eighty percent of the money leaves the area if it is spent with a multinational – but 80pc stays if it is spent at a local trader.”

“The perception of banking and money is that it’s a very ruthless system: people are out for what they can get,” he added. “This is about saying yes to something new. It’s tapping into a different set of values about money.”

More than 300 local shops and other businesses, including butchers, bakers and plumbers, have joined the currency. Interest in the scheme proved so strong that the launch had to be postponed from May to September.

Go Bristol!

Full article here.

In Liberty,
Mike

13 Comments

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  1. Bit-coin and the Bristol pound are on a par with the Occupy Wall Street efforts i.e. people realise something is wrong and they are protesting to the best of their understanding. Bit-coin will end in tears as it has no intrinsic backing. The Bristol pound has a 1 to 1 link to Sterling and is treated the same for tax purposes which means it has no advantage. Keeping the money locally is ignoring comparative advantages from outside the zone. Bristol will be implementing tariffs next and suffering the unintended consequences of that fallacy. The only real solution is for people to have a store of gold/silver and for them to pay electronically for goods and services in weights of precious metal with debit cards. In the meantime, good luck to these well meaning people and I will continue to dream of the day that we have the option to transact in electronic gold.

    • Bitcoin, like gold and silver, is backed by labor (energy, really, when you get down to it). As in mining for gold or silver, there is a labor/energy cost to produce bitcoins. Like gold and silver and dollars and euros and every other currency or form of money in the history of humans, there is absolutely zero intrinsic value to them other than the usefulness that they have to humans.

      The problem with fiat currency is not that it is fiat. Any form of money, whether hard or fiat, can work fine as long as there is nobody destroying the value of the currency by producing it without cost. The problem with the dollar is not that it is made of paper. The problem is that the Fed can create new dollars in any amount at any time with no effort (i.e. backed by no labor/energy cost). The dollars created thereby thus have no value backing them.

      Gold is just shiny metal. It’s beautiful, but so are flowers. Gold has value simply because humans value it (note that flowers also have SOME value, though they are not generally used to transact with). Gold RETAINS value because there is no way to produce it without cost (labor).

      Bitcoins also require cost to produce them. And furthermore, like gold, built into the technical foundation of their production, there is an absolute limit to the number of bitcoins that can ever be produced. If the bitcoin experiment is not destroyed by government meddling or by a loss of confidence (say due to the discovery of a flaw in the foundational algorithms), bitcoins will retain their value specifically because there is no way to produce bitcoins without cost. There is no equivalent to the Fed in the bitcoin universe. The only way to produce bitcoins is by “mining” them, which costs significant effort (value, labor, money, energy, whatever unit you want to measure it in) in electricity and computer processing time.

      All money is ultimately a representation of energy. Good money is money that cannot be diluted (counterfeited) by the costless production of more representation than that which is represented.

      • Thx PJ

        Intrinsic value is something that can be debated at length. I take the view that we do not value a good by the hours of labour to produce it. We value it by looking at its Marginal Utility to an individual at a certain time and place – he classic diamonds and water example.

        Your comment “The dollars created thereby thus have no value backing them” is obviously key. I, however, still do not see a difference between fiat paper and Bit-coins. Believe me, I have tried, even re-reading references to Mises´s Regression Theorem of money.

        I can´t buy the “mining cost” argument for Bit-coins but I am equally perplexed as to why certain Austrian economists whose opinions I value are not dismissing Bit-coin as money out of hand. So I am keeping an open mind and welcome any innovation on the competing currency front. For the moment I am happy to hold gold and silver and do not feel compelled to buy Bit-coins as a store of value.

        Best

        Paul

        • I think that we agree completely, but I think you are missing one step further.

          We seem to agree that anything is valued by marginal utility to an individual at a certain time and place. That’s what I was trying to say when I wrote “there is absolutely zero intrinsic value to them other than the usefulness that they have to humans”.

          We also agree that there is no difference between bitcoins and fiat currency. I also do not see any difference. But in terms of their “marginal utility” as money, I also do not see a difference between gold and fiat or gold and bitcoins. As money they are all the same; useful as such to the degree that we perceive them to be.

          They each have as much value as we imbue them with by our perception of their usefulness to us. They each have zero intrinsic value as money other than their marginal utility.

          What is bad about fiat paper currency as money IN PRACTICE is that it is possible to create it in unlimited quantities at zero cost. What’s good about gold as money IN PRACTICE is that it is impossible (other than fraudulent re-hypothecation and bogus naked short-selling of futures contracts) to produce it without significant cost.

          If the keepers of the fiat were disciplined and trustable, there would be no difference in “goodness as money” between fiat and gold.

          Bitcoins are exactly like gold in this manner. They cannot be produced out of thin air by untrustable or undisciplined monetary authorities.

          There are plenty of ways that bitcoins and gold are different of course. Holding a gold coin (I just picked up one of my 1oz maples) in your hand really creates an experience. Gold is an amazingly beautiful thing. Bitcoins have other utilitarian advantages over gold with respect to digital transactions online. Each one might have an advantage over the other in different circumstances.

          But in terms of what makes fiat bad in practice — again, I claim that the only problem with it is the lack of discipline and trustability of the monetary authorities — bitcoins and gold are both equally good (assuming that you trust the algorithms behind bitcoins).

      • Excellent post.

        Regarding your explanation of bit-coins: I am not sure there is no way to produce bit coins without cost. Labor, electricity and computing time may be a barrier for the average human, but what about the NSA, GoldmanSachs or other entities with access to massive supercomputers? To them the cost is, I am guessing, vanishingly small. No, I take that back: With all the NSA’s expenses being born by the US taxpayer, I think we can safely say their cost IS zero.
        Thus, the NSA, or whoever, might mine, or just buy, and hold bitcoins to contract the BTC-money supply, just the way the Fed does using rates, driving up the value. Subsequently, they can deploy their stash in a millisecond, punch the bottom out of the exchange rate, and start a stampede, a la George Soros, Britain 1992, Thailand 1997.
        All I’m getting at is this: The people for whom BTC must be earned are my friends and peers; perversely, for my would-be controllers and masters, BTC’s are practically free. That asymmetry alone argues against their utility in decentralizing monetary control and in making money more democratic.
        Just a thought.

        Your observation about money being no more that a transferable a life-energy packet is excellent. It amply demonstrates why right-thinking countries hang speculators and counterfeiters: if someone else has to work an entire lifetime to make as much money, stealing it is murder. (Hyperbole, of course)

        Peace out.

        • Hi Hank,

          Thanks for your followup.

          There are infinite unknowns with respect to how the bitcoin story might unfold. But I think that your concern about the NSA or whoever mining bitcoins is no different from imagining the US Government deciding to mine gold financed with taxpayer dollars. I’m not saying that it couldn’t or wouldn’t happen, but it is still a cost, even though it may not be born by those who ultimately benefit.

          At the present cost of CPU cycles, electricity, the computational difficulty of “mining” bitcoins, and the exchange rate of bitcoins to USD, it is not an extremely profitable enterprise. People are barely doing better than breaking even. The NSA doesn’t have any magic computers anywhere that can compute “cheaper” than my iPad.

          Also, as I mentioned, much like there is a finite amount of gold in the earth, the bitcoin system has built into it a finite total number of bitcoins; 21 million to be exact, and the coins are fairly well distributed.

          I’m not saying that I know for a fact that the system and its algorithms are bullet-proof. But whether and to what degree it can be gamed or subverted is a different question than I think we are discussing here.

          Although it was more of a David and Goliath story than the reverse one you are describing, your Soros scenario is as plausible with bitcoin as with any other currency. Right now China holds trillions of dollars in US Debt. They could certainly crater the value of the dollar in a heartbeat by dumping all those treasuries on the open market. So far it seems they don’t feel that is in their best interest.

          Anyway, this is really interesting fodder. I personally think that the most plausible scenario for bitcoin is that if it ever becomes threatening to TPTB, they will merely legislate it out of existence. I hope that’s too pessimistic.

  2. I respectfully disagree with Mr. Musgrove. There was no intrinsic backing for tally sticks, except the power of the state in the form of exclusively extinguishing tax debt, and they worked for hundreds of years during the Middle Ages and beyond, if I am not mistaken. It is, and has always been, the mutual agreement and acceptance of the parties that makes for medium of exchange. This agreement can be lateral among the parties making the exchange, in which case almost anything is fair game, from cowry shells to bit-coins to walrus ivory. Or it can be enforced from above by the power of the state and merely agreed to by the parties for lack of a legal alternative. Again, if the state is in charge it can be PM backed or not, made of paper or hazelwood, debt based or sovereign; all of these work and have worked in History. Bit-coin needn’t come to tears on the issue of backing.
    Importantly, I share Mr. Musgrove’s preference for PM as a store of value, but as a backing for currency as a medium of exchange, it is not necessary, and unless one is a plutocrat, not preferable. I’ve said it on this string before: A PM-backed currency makes for the perfect mechanism for the infinitely rich to vacuum up all the public and private gold of any nation stupid enough to link its medium of exchange to its national wealth. The ability of the banks, and their owners the Senior Capital Pools, to raid a nation’s assets, from the fungible to the real to the historical(!), is being proved daily. (Guys, that’s why it’s in the GOP platform.)
    Closing the circle here: tally sticks were used, particularly in rural communities, due to a shortage of state coins which medieval social and commercial structures concentrated in the strong hands of the nobility, in the cities and citadels and from which it never emerged back into local hands. That should sound familiar, as we reenact a similar phenomenon today. The banks are superfluid with currency but will not lend into local economies like Bristol. Hedge funds, yes; human beings, no. For the populace in a debt-based money system, therefore, the money supply has stalled or shrunk. Worse, the lions share of money, state coin, that is earned and spent by locals in Bristol is vaccumed up by vast centralized, strong-handed entities, be they the TBTF banks, the fortune 100, or the state itself, where it stays leaving little or no liquidity in Bristol as a medium of exchange among Bristoliers (?). So, guess what?, they’re making their own tally sticks to keep their local economy liquid, encouraging local commerce and unintentionally making the would-be neo-feudal overlords irrelevant.
    Yup: Go Bristol!

    • Hi Hank

      Thx for the info about the tally sticks, although I can´t understand (yet) how Bit-coins can be compared. Tally sticks seem like a interest free loan from the Government and these loans get paid back in taxes – are bit-coins paid back and the debt squared away?. I will have to research some more to help my understanding. Another point is that I think the Government should keep out of the business of money and concentrate on protecting my liberty.

      I also still don´t really follow how the Bristol Pound is any different from a GBP when it´s exchange value is fixed at 1-1. Wouldn´t it be a better idea if the people of Bristol could buy grams of silver within a pool (e.g. an account with a bullion vault) and then trade in amounts of electronic silver? This would be more independent and the users would have money which has a store of value. Hugo Salinas Price of Mexico has been advocating this for a long time. For me, money has to be a store of value. Obviously legal tender laws need to be sorted out as Utah are trying to achieve.

      Again, thx for your reply Hank and I will look into it further to try and get my head around it all.

      Best

      Paul

      • Hey Paul,

        A pleasure to speak with you.
        Stepping back a stride or two from the technical details of bit-coin or the historical ones of tally sticks, it might be useful to make another observation: With the dollar on death’s door, Money is breaking down to it component utilities.

        That’s ultimately what we’re all trying to get our heads around, I think. No one in the West in our generation has had do this before.
        Off the top of my head, and I am happy to be corrected, money acts as a “store of value,” as a “medium of exchange,” and as an “extinguisher of of official debt (Taxes).”

        Uniquely in history, our generation of Americans had to look no further than the US dollar for satisfying all three utilities. Uniquely, our grocery money was also the international commercial currency, while being the World Reserve Currency, “as good as gold.” We’ve lived our entire lives in a currency many in the world would have paid a sharp premium for to stash beneath their mattress as a store of value, say a dowry or legacy, nestled beside their gold and their silver.
        What I think is happening is we are finally having to learn to think of money QUALITATIVELY, the way many in the world have always had to. It’s an acquired skill and we’re not great at it yet. So we keep trying to reinvent another thrice-good currency, but nothing is fitting together very well.

        My gut is that it won’t. Until another slam-dunk currency comes along we’re going to have to get used to apportioning our money among different currencies with differing utilities. I’m guessing you and I would place our savings in PMs; keep our spending money in whatever worked where we live, be it official or local scrip; and pay our tax in state coin.
        Irksome indeed for a generation that never had to think this out before.

        Peace out.

        • Hi Hank

          Yes, primarily a medium of exchange and then a store of value but we don´t have to bring taxes into the equation to make it a general definition of properties.

          Our generation have been using a dollar which has not had a store of value since 1971. It just has taken a long time for people to wake up to this.

          Thx again Hank

          P

  3. Bristol pound I like that it sounds like good money!

  4. Good I agree with the idea, and someone is getting off his backside and taking direct action.

    Others should do the same then the sick parasites in banking would suffer the wrath of peoples distrust.

    Governments the EU and the whole corrupt system controlled by Banks and the insurance industry they own are now on unsafe ground.

    itsfraud.com

  5. PJ Vandal, I read your comments with interest. I, however, totally agree with Paul. Let me ask you a simple question…Can you buy an Armani suit with an ounce of gold, fiat value of course? Next question…could a Roman buy the equivalent suit 2000 years ago with an ounce? If your conclusion is yes to both, then you’ll find that gold held purchasing power for a minimum of 2000 years.

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