Well I just learned a lot.

Matt, I'm not sure you understand my concern. Alright.. so I said fiat when I meant paper. I don't really care that it's paper. And I didn't even get into frb or business cycle effects, that's not my concern. Here's the problem: Because their is a two-way link between the plenty and FRNs: - Whoever prints the plenty gets free money - This wealth is siphoned off from all current holders of FRNs, because now each FRN represents a smaller percentage of the overall money supply. If you are unable to see this, consider the extreme example. Say that there is 1 trillion FRNs in circulation, and I'm rich and I had 1 billion of them. So I control 1% of the entire money supply. Then somebody introduced the plenty at par with the FRN: 1 Plenty = 1 FRN. Then they printed 1 trillion plentys and gave them out to friends. Now, I control 0.5% of the entire money supply! I just lost half of my fortune! Expanding the money supply is expanding the money supply. There is no way around. If there is a link between FRNs and the plenty, then they are logically interchangeable. Printing one will have the same consequences and will be breaching the same moral laws as printing the other. So, YAL is on a END THE (national) FED campaign, while being on a START THE (local) FED campaign? This is hypocritical! "As time goes on and local production is stimulated (ie., more value is created in the form of commodities) by the expressly local circulation of PLENTYs, additional PLENTYs representing the commodities will be created." Please cite evidence that says that the plenty is or ever will be a commodity currency. I think it's strictly a paper currency. Finally, consider the effects that the plenty will have on people outside the area. Gresham's law will hold that the plenty will quickly be adopted by those in the area because it's bad money. The good money (FRNs) will leave the area, and will not be chasing many of the goods inside the area. So we have the same amount of FRNs chasing fewer goods, which will result in a slight rise in prices. So, people outside the area will lose purchasing power. This exercise just serves as a more formal proof to the money supply argument I posted above.

The PLENTY will start out being convertible to the dollar, because of legal tender laws and exchange rate requirements. Dr. Lawson's goal, however, is to introduce new PLENTYs as acceptance grows that are directly backed by commodities - be it locally produced biodiesel, agricultural produce, or precious metals. The idea is to get people thinking about the nature of money and stimulate local production at the same time. Great idea, and I can't wait to be a part of it!

Isn't this counterfeiting? If this fiat money is printed, and has an exchange rate to the dollar - it is morally and fundamentally the same as a city being able to print dollars. This helps the people in the district because they get free money. This hurts people elsewhere because for each Plenty "printed", the percentage of the money supply that they control is lowered... Or do I have it wrong?

Community Currency Magazine You can't use the Gresham's Law argument because the Plenty is a volutary use currency. Gresham's law is only when there are two competing currencies which are both legal tender and required to be accepted. ""Gresham's law applies specifically when there are two forms of commodity money in circulation which are forced, by the application of legal-tender laws"" "...it is morally and fundamentally the same as a city being able to print dollars." No. Again, this is volutary use. Try to think of the Plenty as a coupon, you can use it alongside the USD if you want and you get a bit of a discount on your purchase because of their conversion at .90 "Whoever prints the plenty gets free money" No. Nobody gets free money, before even one plenty is put into circulation, there must be the dollars in the local bank backing that one plenty. You can see the Plenty bank account, one Plenty goes out, one dollar gets deposited in the account. No local currency is given out as free and especially not to those operating the business. Wealth, as you put it, is neither created or destroyed. You can be a real good idea about how these systems work from the www.berkshares.org web site or http://www.smallisbeautiful.org/ This local currency has several million in local circulation. The Plenty should be a huge success in NC but you never mentioned one of the biggest benefits, which is using a local currency keeps the money circulating in the community. Shop at Wal-Mart and .90 of each dollar spent leaves the area for their headquarters and on to China. Us the Plenty and it can't leave the area, $1 (100%) will get re-spent at another local merchant. The Berkshares are said to circulate through 4 local transactions before getting converted back to USD, that is 3 more than Wal-Mart. It's very good for the local economy. If you like the idea of community currency you can check out our monthly online magazine. Mark editor@ccmag.net

Nice for supporting local businesses, except its just another fiat currency. Private, but still fiat. If the dollar collapses, the PLENTY collapses along with it, correct?

You're absolutely correct, but it's a start!

Mark - we had cleared most of that up with the earlier discussion. Thanks though.

I don't think you really get what I'm saying either. Because the plenty is a full reserve currency, there's no real expansion of the money supply. Dollars become trapped (for lack of a better word) in deposit accounts and cannot be loaned out. The plenty just replaces the dollar inside the piedmont region. One or the other must be in circulation - they cannot both be in circulation at the same time, as per the bylaws, which you apparently didn't look at like I suggested. Article VII states: Section 1 Convertibility of the PLENTY A. The Piedmont Local EcoNomy Tender (PLENTY) is convertible to Federal Reserve Notes at participating financial institutions (Reserve Partners) at the exchange rate approved by the Board of Trustees, but is not guaranteed by any person or institution. B. All circulating PLENTYs must be fully backed by appropriate reserves at all times. The Board of Trustees will work with Reserve Partners to assure full convertibility with appropriate audits and internal controls. C. The Board of Trustees may identify and authorize other reserve commodities suitable for convertibility in the interest of sustainable local economic development. I'm not as familiar with Gresham's law, so I can't address that argument, but I can assure you, this isn't just replacing the national Fed with a local one.

I go to Wake and met Mr. Lawson this weekend, and I'm pumped about the PLENTY.

Aha, so the money used to purchase the plenty is not revenue for the bank... it's kept as reserve (hopefully in a "lockbox"). Now it makes sense. I had read the bylaws, but they were written in legalese and were too vague. Specifically, "All circulating PLENTYs must be fully backed by appropriate reserves at all times" was too vague but I guess this is the part that says the FRNs that were exchanged for the plentys will be kept in reserve, out of circulation, and will only enter back into circulation when an appropriate number of plentys have been taken out of circulation. Of course, there is serious potential for fraud here, so I hope these are some good audits. If the FRNs that purchased the plentys were revenue for the bank or were able to enter circulation in some way, then all of my comments would apply.

Young Americans for Liberty The PLENTY... From Young Americans for Liberty, this is a great article with discussion on the Pittsboro Plenty. Comments welcome....

Plus its a good way of showing disapproval for the dollar. Even if its fiat, its still activism.

If what Matt says about turning it into a commodity based currency really happens, that is great!

Jack, despite being a paper currency at first, the PLENTYs cannot be characterized as fiat because using them is voluntary. Technically, the PLENTY would be more accurately characterized, I suppose, as a representative currency. That is, at first, 10 PLENTYs represent $9 (PLENTYs must be bought at this rate - it is not purely an exchange rate). As time goes on and local production is stimulated (ie., more value is created in the form of commodities) by the expressly local circulation of PLENTYs, additional PLENTYs representing the commodities will be created. Finally, I am almost positive that PLENTYs will be a 100% reserve currency, thereby preventing your final concern as well as the boom and bust cycle created by fractional reserve banking. **This is my interpretation of everything, just having started getting involved with the PLENTY. I apologize if any of this is incorrect, since I'm still learning about the concept. I'd suggest that everyone take a few minutes to look over the bylaws posted on theplenty.org**

I withdraw this claim from above.. "If the FRNs that purchased the plentys were revenue for the bank or were able to enter circulation in some way, then all of my comments would apply."