DailyDirt: In Money, We Trust (Sometimes)
from the urls-we-dig-up dept
Money is an interesting concept. Government institutions create a supply of money and try to control the value of it within some acceptable ranges. But when the value of money goes out of control, the solutions for getting it stabilized seem a bit illogical. Still, if you can get enough people to switch their faith from one money to another, it seems to work. Here are a few more stories on the topic of money and currency.- It's intriguingly difficult for any country that currently uses the euro to try to stop using it and switch to some other form of currency. So difficult, in fact, there's a $400,000 prize for anyone who can figure out a process that would actually work and not create monetary chaos. [url]
- Some Brazilians are using locally-printed currencies instead of its national reais -- such as the capivari, which is just one of the 63 local kinds of money. The capivari is a printed bill (with a picture of a rodent on it!), equal in value to the reai, but retailers give customers discounts for using capivaris (making these local bills into fancy coupons, essentially). [url]
- Last year, the IMF's Dominique Strauss-Kahn proposed an alternative to the dollar in central banks' foreign currency reserves. A system of special drawing rights (SDRs) for central banks would be priced according to international trade instead of any single nation's currency. (It's not an entirely new idea, but it's never caught on.) [url]
- In Vietnam, there's a penalty for posting prices in dollars instead of the local currency. The local currency suffers from high inflation rates, so they might want to look into Brazil's monetary history for some lessons.... [url]
- To discover more stuff on economics, check out what's currently floating around the StumbleUpon universe. [url]
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Filed Under: brazil, capivari, currency, dollar, dong, euro, money, real, sdrs, vietnam
Companies: imf
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but is it possible for 1 country?
I guess it would be similar to asking "what if Alaska wanted to stop using the dollar?" -- but there are additional complications for the US states b/c states are tied to the federal gov't much more than any EU member is tied to the EU.
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Re: but is it possible for 1 country?
Once Germany leaves then it may become possible for another country to go (eg the Netherlands). Basically the Euro can be dismantled from the top down - but definitely not from the bottom up.
I am amazed at the way politicians, TV pundits, economists etc carry on talking about Greece leaving the Euro as if it was actually practically possible - these people really have no brains - or don't use them (same as on other issues we discuss here I suppose!).
Of course Greece may default but leaving the Euro is not an option - and even if it were it wouldn't help - they would just turn into Zimbabwe - as it was when it still used its own currency.
Remember Zimbabwe got out of its worst phase by abandoning its own currency and switching to the use of foriegn currencies such as the US dollar, pound sterling or South African rand.
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Re: Re: but is it possible for 1 country?
Brazil had the same problem their own money was no good and people kept buying dollars and trading in dollars, but they changed all that using virtual currencies.
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L'affaire DSK
“What Really Happened to Strauss-Kahn?” by Edward Jay Epstein, The New York Review of Books:
(Source picked more at less at random from the top Google results....)
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A new economic stimulus strategy?
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Re: A new economic stimulus strategy?
It would be cutting off your nose, to spite your face. While the poor may lose less money in absolute terms, their real wealth will suffer astronomically compared to the richest people. Is it worth taking money away from the most impoverished?
Economies require at least one relatively stable element to trade on. If the currency becomes too unstable, nobody will want to use it because the fair value of exchanges for goods and services can't be determined accurately (or in the case of hyperinflation, the value of currency isn't even able to be approximately determined)
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Re: Re: A new economic stimulus strategy?
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Create a virtual currency(URV) and after a while switch to it.
Brazil changed its currency from Real (Réis, 1790–1942) to Cruzeiro (1942–1967) to Cruzeiro (novo, 1967–1986) to Cruzado (1986–1989) to Cruzado novo (1989–1990) to Cruzeiro (1990–1993) to Cruzeiro real (1993–1994) to Real (1994–present).
https://en.wikipedia.org/wiki/Brazilian_real
http://colnect.com/en/banknotes/lis t/page/1/country/3981-Brazil
NPR - How Fake Money Saved Brazil
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Re: Brazil..
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Re: Re: Brazil..
http://www.thewebofhope.com/alternative-currencies/
http://juggernautcometh.com/blog/? p=634
http://www.worldchanging.com/archives/003575.html
http://www.transaction.net/money/
http:// socialter.fr/when-the-poor-districts-create-their-own-currency/
http://www.neweconomics.org/categor y/tags/alternative-currencies
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Re: Re: Re: Brazil..
If a network of local currencies actually can exist without significant drawbacks to the larger national economy, then it might serve as some kind of instrument for countries like Greece to move away from the euro. Greece would have to start creating a whole bunch of local currencies while still saying that the national govt upholds the euro. If the local currencies really flourish, then Greece could someday introduce a new national currency based on some aggregation of the local currencies. It would be like applying the "special drawing rights" concept of the IMF on a national level instead of an international level....
Perhaps it's time for me to write this plan up and try to get that $400,000 prize! :P
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Re: Re: Re: Re: Brazil..
About fraud and tax evasion, that is not a problem, the problem is circulating money locally and those things do exactly that and as long as there is trust in the currency it doesn't matter what it happens in other places, people evading taxes will spend more locally, and people who actually commit fraud are people who in some situations actually create wealth from nothing just like banks.
Money is for the most part a psychological thing, the important part is production of goods and services no matter how it is done even for free would work if people would do it, in the end you can only have what has been produced you can only enjoy a service if it is being offered and there are many ways to achieve that, if there was not countries with no economies would never become "developed", in China today you can see that happening, people producing things for little to no money, but producing the things and evolving their society despite a number of factors.
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Well that network of local currencies actually already exist and is more or less reasonably understood. It is called global economy where every country has their own currency, whatever happens in that scale you can be assured it probably will happen on smaller scales too, maybe with one or two surprises along the way.
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