March 22nd, 2012

Greeks Adopt Alternative Currencies as Economy Implodes


-

Greece

-

Greeks Adopt Alternative Currencies as Economy Implodes

Written by Alex Newman   * Wednesday, 21 March 2012

http://www.thenewamerican.com/world-mainmenu-26/europe-mainmenu-35/11265-greeks-adopt-alternative-currencies-as-economy-implodes

As Greece’s economy and the euro continue to struggle, regular Greeks are increasingly taking matters into their own hands, creating informal underground barter markets and even alternative currencies. And the government is actually encouraging it.

Over a dozen non-euro trading networks are already believed to be operating in communities throughout the embattled nation, with more on the way. But one effort in particular — called Local Alternative Units, or “TEMs” in Greek — has attracted a great deal of international attention.

In the port town of Volos — where unemployment is above 20 percent, the economy is struggling, and tax rates are rising — a group of locals decided it was time to take action. The population still had the same skills and resources as before the crisis, just not the euros needed for commerce.

So, a handful of people got together and formed the alternative currency known as the TEM. It quickly took off. And major newspapers and media outlets around the world — from the United States to the United Kingdom — have taken notice as it continues to expand.

“Ever since the crisis there’s been a boom in such networks all over Greece,” University of Crete vice chancellor and political economy professor George Stathakis told the New York Times, adding that despite an enormous government sector, Greek “social services” were being overwhelmed. “There are so many huge gaps that have to be filled by new kinds of networks.”

The TEM system works by allowing people in the community to set up an account on an online network, connecting them with others in the area with various needs and a wide array of services to offer. Users also receive a sort of booklet allowing them to essentially write “checks” to pay for goods and services.

A real market where people can meet to trade in TEMS is also a key component of the emerging network. And efforts are currently underway to establish a daily market in an unused building for locals to engage in commerce using their system.

Babysitters, farmers, teachers, electricians, barbers, bakers, computer technicians, opticians, veterinarians, and more are all represented. Most traders accept both euros and TEMs, or some combination of the two.

Member accounts start with zero TEMs, although users are allowed to borrow up to 300 units if they agree to repay it over a certain time period. And to prevent “hoarding,” the system’s managers explained, no user is allowed to have over 1,200 units of the currency.

“It’s an easier, more direct way of exchanging goods and services,” German-born homeopathist and acupuncturist Bernhardt Koppold, an active member of the Volos network, told the UK Guardian. “It’s also a way of showing practical solidarity — of building relationships.”

Dozens of other users expressed similar sentiments about their budding system. Co-founders of the TEMs network also explained that if the crisis were to spiral further into the realm of cataclysm, the alternative-currency system could help take up the slack — ensuring that a functioning economy would allow people to continue trading for survival.

Even local officials are encouraging citizens to get involved. Volos Mayor Panos Skotiniotis, for example, told NPR that such initiatives are especially valuable during the economic crisis as the government struggles to pay its bills.

“This is a substitution for the welfare state, and that is why this municipality is encouraging it and wants it to grow,” he said. The local government has even printed leaflets explaining the system and helped promote panel discussions about it.

At the national level, politicians seem to support the idea, too. Late last year, the Greek Parliament even passed a law urging citizens to build non-traditional forms of “entrepreneurship and local development.” The legislation also granted the informal networks official non-profit status, helping to ease the tax burden on struggling Greeks saddled with massive debts imposed by national and international officials.

-

Read whole article, with embedded links, at original site:

http://www.thenewamerican.com/world-mainmenu-26/europe-mainmenu-35/11265-greeks-adopt-alternative-currencies-as-economy-implodes




SUPPORT OUR BILLBOARD CAMPAIGN
Placing billboards outside of military bases to remind service members of their oath


Please donate and support Oath Keepers mission, every little bit helps!



 Read More Posts

Comments posted belong to the commenter alone, and are not endorsed by Oath Keepers or the administrators for this site. We will remove offensive, racist, or threatening comments.

14 Responses to “Greeks Adopt Alternative Currencies as Economy Implodes”

Pages: [1] 2 » Show All

  1. 1
    Freedom Warrior Says:

    The Greatest Depression is Coming Soon
    http://www.youtube.com/watch?v=JaejhaT9c50&feature=related

  2. 2
    Austrian Economics is Color Blind Says:

    It looks like it’s a fiat currency, so it will surely end in disaster.

    Early on in America’s history, we adopted a fiat currency, and people were supposedly saying “How come you’re so prosperous?”, and we sad it was because of fiat money.

    But fiat money just tranfers wealth, so it looks like what’s happening in Greece is that the new fiat currency is shifting wealth from the political class to more of the non-political class – but also, ultimately, to the creators of the new fiat currency – which will eventually end like the Euro and the US Dollar.

    Further, they are under the incentive-sapping assumption that “hoarding” money has a negative effect on the economy (it does not). Sound money increases in value, over time, and the money that people “hoard” represents value for which they worked and that they do not wish to trade for anything else at the moment.

    It’s going to be hard to save for the future, and hard to lengthen production processes, unless people can “hoard” money, let alone save it in a bank.

    This will end in disaster, and those who don’t understand that fiat money is anti-free-market will blame the free market when this thing collapses, too.

  3. 3
    Austrian Economics is Color Blind Says:

    This article by Ron Paul is relevant to this discussion:

    Advice to Geithner
    http://lewrockwell.com/paul/paul797.html

  4. 4
    PJ London Says:

    Austrian Economics :

    It is not a “Fiat” currency at all. It is a simple book-keeping system, with a notional value. Nobody can print “TEMS”, nobody can hoard TEMS, and the only possible loss, is that a person can ask for 300 TEMS credit, to be repaid by services or products. If you do not repay or contribute, you will be excluded from the exchange.
    The great thing is that there is no interest charged on negative balances and no interest paid on positive balances.
    When we had a “Village shop” we carried a debtor book, as some customers were seasonally paid, and yes, as we had a safe, some customers left their valuables with us for safe-keeping. It was a service to our customers. It did not mean we were creating a “Fiat” currency.
    It is not Austrian economics, it is Village economics.

  5. 5
    Edward Borley Says:

    It is not a new fiat currency. At its simplest it is a WHiR currency. Money is created not by stroke of pen nor printing, but by WORK being done. Such a system could only collapse internally if people stopped needing others to work with them. OF course since it is not a fractional reserve fiat system it will be driven into the ground by those who do run such systems. It will only be allowed to prosper a short time, just long enough to ensure that everyone notices when it is blown apart by those who do create “money” at the flick of a switch. There’s nothing they hat more than competition. Don’t conflate Austrian economics with “gold” being the only real money. There are a multitude of currencies to choose from, and there should be. It’s the MONOPOLY of the central banksters that is the root of the problem.

  6. 6
    Ace Says:

    Read –

    We Were Warned – Dead Presidents Speak

    Link -
    http://beforeitsnews.com/story/1927/230/We_Were_Warned_-_Dead_Presidents_Speak.html

  7. 7
    Austrian Economics is Color Blind Says:

    PJ London @ comment #3,

    If it’s not a commodity currency, then it’s a fiat currency.

    Further, TEMs are pegged to the Euro (which, I suppose, SHOULD be the case when starting to transition from an existing currency; but it shouldn’t remain so); and people are printing vouchers for them, such that you have a paper representations of a fiat currency.

    Battered by Economic Crisis, Greeks Turn to Barter Networks
    http://www.nytimes.com/2011/10/02/world/europe/in-greece-barter-networks-surge.html?pagewanted=print

    - Begin excerpt -

    One unit of TEM is equal in value to one euro, and it can be used to exchange good and services. Members start their accounts with zero, and they accrue credit by offering goods and services. They can borrow up to 300 TEMs, but they are expected to repay the loan within a fixed period of time.

    Members also receive books of vouchers of the alternative currency itself, which look like gift certificates and are printed with a special seal that makes it difficult to counterfeit. Those vouchers can be used like checks.

    - End excerpt -

    When they borrow “up to 300 TEMs”, what is it that they’re borrowing? That’s artificial credit expansion.

    Look, it’s not that fiat money can’t, in theory, work; Rather, it’s that the incentive to artificially expand the money supply is ALWAYS too great.

    The TEM system is going to breed resentment among those who want to expand a production process, but will not be able to because of some arbitrary limitation on “hoarding”.

  8. 8
    Austrian Economics is Color Blind Says:

    Edward Borley @ comment #4,

    I agree with you that Austrian Economics should not be conflated with gold being the only real money.

    I might disagree with you, however, depending on what you mean by “monopoly of the central banksters”.

    A central bank is uneconomical because there’s no way for it to know what the interest rates should be – people’s time preferences are different in different locations and for different reasons, so you would have to have local banks and no “lenders of last resort”.

    I want to isolate this issue of central planning of the money supply from the issue of monopoly, because I don’t see free market “monopolies” as a bad thing. So, if the unlikely were to happen, and for some reason a central bank (which held 100% reserves) became economical, it’s free-market monopoly status wouldn’t be a problem, so long as people were free to compete with it.

    It’s never the bigness of a company (or bank) that results in crashes, but rather being led to believe, by artificial credit expansion, that one has more money than one does.

    Precious metal money solves this problem because it is difficult to inflate its supply.

    But yes, you’re right that the market needs to be free to decide what the currency will be at any given time.

  9. 9
    PJ London Says:

    Austrian Economics @6

    Definition :
    “Fiat money is money that derives its value from government regulation or law. The term derives from the Latin fiat, meaning “let it be done” or “it shall be [money]“, as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.”

    I am sorry, but I see TEMS as a “Note” on barter of services and products.
    “When they borrow “up to 300 TEMs”, what is it that they’re borrowing? That’s artificial credit expansion.”
    I do not see anything “artificial” about it. If I pay in advance for some service, by say providing food and board, then I am extending credit (or charity) in expectation of some repayment at a later time. But as this is only using my (or my groups’) services or products, how is it inflationary?
    I believe that you are confusing a “physical” commodity, (gold) with an ability (and an honest desire) to deliver.
    The “Promise to exchange” which is specific in the commodity (gold) based currency, could just as easily be based on grain, or a meal, or a massage. If I were to hand out tokens (currency) for a meal, in exchange for services provided to me, the value of the token would be based on the satisfaction that holders of the token derived from my meal and my ability and willingness to deliver. If I have the means and ability and willingness to deliver 300 meals at some future date, and others are willing to accept my tokens (IOUs) then there is nothing artificial or inflationary about such tokens.
    I think that you are confusing the “Honest” concept of currency with the knowingly dishonest practice of “Fiat Currency” creation, as practiced by bankers and authorised by government.
    You accept :
    “TEMs are pegged to the Euro (which, I suppose, SHOULD be the case when starting to transition from an existing currency; but it shouldn’t remain so”, I do not agree, I think that it is their error is to peg it to the Euro, they should have started out with a unit such as “a loaf of bread” , a “litre of Olive Oil”, an “hours manual labour in a vegetable garden or kitchen”. When the Euro inflates, then their TEMS will reduce in value in tandem. It means that the TEMS loses all the advantages of an independent currency.
    TEMS is not Fiat currency, but, because they have aligned it to such a currency, it loses much of its’ advantage. The only advantage for TEMS, is that its’ issuance is independent of the government. They have, (by pegging it to the Euro), gone into competition with the Central Bank using a “parallel” currency. They are just limited in the exchanges where it will be accepted, (that is until the government accepts TEMS for payment of taxes. Oh! hang on, Greeks are smart, they don’t pay taxes.)

  10. 10
    Austrian Economics is Color Blind Says:

    PJ London @ comment #8,

    1. “I do not see anything “artificial” about it. If I pay in advance for some service, by say providing food and board, then I am extending credit (or charity) in expectation of some repayment at a later time. But as this is only using my (or my groups’) services or products, how is it inflationary?

    Your service is not artificial, but the TEMs you accept in return, if they can be created out of thin air, are artificial.

    But, like with paper money, if inflation can be kept from happening, then it can work. But, honestly, the incentive to create TEMs out of thin air will prove to be too great (especially with the prohibition on “hoarding”).

    2. I believe that you are confusing a “physical” commodity, (gold) with an ability (and an honest desire) to deliver.
    The “Promise to exchange” which is specific in the commodity (gold) based currency, could just as easily be based on grain, or a meal, or a massage. If I were to hand out tokens (currency) for a meal, in exchange for services provided to me, the value of the token would be based on the satisfaction that holders of the token derived from my meal and my ability and willingness to deliver. If I have the means and ability and willingness to deliver 300 meals at some future date, and others are willing to accept my tokens (IOUs) then there is nothing artificial or inflationary about such tokens.

    No, there would be nothing inflationary about your tokens until someone decided to replicate them. Again, though, the incentive is too great to not inflate the token supply.

    (There’s no promise to exchange inherent in a commodity currency, by the way. If, for some reason, nobody wanted to accept your gold or silver in exchange for goods, that would be their right. Also, grain would make a poor currency because the supply can be easily inflated.)

    3. I think that you are confusing the “Honest” concept of currency with the knowingly dishonest practice of “Fiat Currency” creation, as practiced by bankers and authorised by government.
    You accept :
    “TEMs are pegged to the Euro (which, I suppose, SHOULD be the case when starting to transition from an existing currency; but it shouldn’t remain so”, I do not agree, I think that it is their error is to peg it to the Euro, they should have started out with a unit such as “a loaf of bread” , a “litre of Olive Oil”, an “hours manual labour in a vegetable garden or kitchen”. When the Euro inflates, then their TEMS will reduce in value in tandem. It means that the TEMS loses all the advantages of an independent currency.

    Yes, I concede to some extent – perhaps I misspoke.

    What I was trying to say was that since their price structure is largely based on Euros, a lot of goods are going to have the same exchange rates as they did under the Euro, to begin with – even if it were pegged to something else. It must begin this way, but it won’t stay that way; Unless, as you noted, the TEM remains pegged to the Euro, which is the case now.

    I agree that if the Euro inflates, the TEM will devalue accordingly.

    I would add that when it comes to pricing in actual goods (such as bread, olive oil, etc.), that such pricing will have to be done on an individual basis, because people value goods differently; Which is why, even if you pegged these goods to gold and silver, they’re going to have different gold and silver prices depending on the store or person.

    So, I think it’s a very bad idea to peg the price of anything to an easily perishable, easily inflatable, or non-scarce commodity, unless that price pertains to you and you alone.

    4. TEMS is not Fiat currency, but, because they have aligned it to such a currency, it loses much of its’ advantage. The only advantage for TEMS, is that its’ issuance is independent of the government. They have, (by pegging it to the Euro), gone into competition with the Central Bank using a “parallel” currency. They are just limited in the exchanges where it will be accepted, (that is until the government accepts TEMS for payment of taxes. Oh! hang on, Greeks are smart, they don’t pay taxes.)

    You bring up a important aspect: government involvement in what is essentially the people’s rejection of government’s monopoly of the money supply.

    Why do the people care whether the government likes their TEMs or not? The government screwed the people with their fiat money. The people should reject the government’s help, opinion, etc.

Pages: [1] 2 » Show All

Leave a Reply

© 2012 www.oathkeepers.org | Oath Keepers Corp Address: 5130 S. Fort Apache Rd - Las Vegas, NV 89148