Hoard Stuff, Use It To Back Currency Of Your Creation

Printing your own ersatz currency is legal, so long as you don’t counterfeit government notes, which explains Disney Dollars, Microsoft Points, Linden Dollars and the like. Matthew McDermott of the environmentalist blog TreeHugger points to localities and business that run successful operations that use their own currency, including Ithaca Hours in Ithaca, NY and BerkShares in Massachusetts:

Launched in the fall of 2006, BerkShares circulate in the Berkshire region of Western Massachusetts. By some estimates BerkShares is largest circulating local currency in the world, with two million Berkshares issued to date. Bills are issued in denominations of 1, 5, 10, 20 and 50. Currently some 350 businesses accept the currency and 5 different banks offer exchange services at 12 locations. BerkShare checking accounts, ATMs and loans are planned.

Most micro-monetary systems base their currency on the goodwill of businesses or locales, but you can also back your bills with more tangible things. The post got Motley Fool blogger Chris Graley, an avowed precious metal hoarder, to speculate on printing up his own guaranteed currency on a lark. Graley said his money would be more desirable than the dollar in times of high inflation:

Here’s what I would have to do. First I would need to create my own exchange rate. I would need a program that other people could regularly see on my website that updates itself. I would need notes that are payable in the US dollar value of grams of metals. Platinum, Gold, Silver, Palladium and even Copper and Steel. I don’t currently invest in copper or steel, but I would have to do this during inflation or I wouldn’t be able to buy small ticket items. (Probably wouldn’t be many small ticket items during inflation anyway.) I would also convert directly to the underlying metal for a fee. This has to be a fee that would give me a profit. I would need a guarantee, but along with a couple of banks, I deal with a local credit union and I know the president of the CU pretty well. I’m pretty sure that I can get him to give me a letter that he would honor my currency up to the total amount of the accounts I have with him.

Now I do business with enough people that I’m sure a few of them would take my currency today. As inflation sets in, I’m sure a lot more will take it. Of course, I’m gonna play up the inflation aspect and explain the advantage of having an inflation hedge. I can avoid the costs aspects, of liquidating metals early, by maintaining a higher cash percentage before inflation skyrockets. Once I’ve generated confidence, a unique thing will happen. First the people that have my currency will want to hold onto it. That means that my metals are still in my possession. I’ve essentially bought things on credit with zero interest. That will compound as people realize that my cash is better than the government’s. I can buy things at a profit if people want to convert to metals.

Which gives me the idea to establish Phil Pesos guaranteed by my stacks of hoarded shoeboxes of 1990 Donruss baseball cards. Any takers?

How to Print Your Own Money, Build Community & Not Get Arrested by the Feds [TreeHugger, via The Motley Fool]


Edit Your Comment

  1. larrymac thinks testing should have occurred says:

    I would think that Canadian Tire Money, first introduced in 1957, was more widely circulated than these johnny-come-lately BerkShares. Heck, even eBay takes Canadian Tire money!

    • Trai_Dep says:

      @larrymac: Oh, Canada, isn’t it uncharacteristically unseemly to preen so? First the Looney beats down the $US with a stick, now you need to produce another currency to rule over the buck?
      Is that the monetary equivalent of a hip-jutting victory dance at the goal line? (btw, that’s a reference to a game we play here called Football, which is similar to yours except less ice, more padding, a bigger, softer puck and QUITE a lot more anabolic steroids (but with more retained teeth to even things out)).

      • larrymac thinks testing should have occurred says:

        @Trai_Dep: For the record, I am not Canadian (so don’t cue the Molson commercial). I was, however, mentioned by name in a book by famous Canadian author Will Ferguson.

      • B1663R says:

        @Trai_Dep: Woah, slow down son.
        Canada has had football for like 150+ years (Google Grey cup)

        we are better too! we have one less down and 10 extra yards.


        • Trai_Dep says:

          @B1663R: I’m especially fond of your rule allowing Grizzlies (free-range only) into the defense lineup. Now that’s smash-mouth TV!

    • Tim says:

      @larrymac: eBay also accepts “other negotiable instruments,” so you could use BerkShare on eBay (I’d bet you 5 BerkShare that people already have).

    • sirellyn says:

      @larrymac: Canadian tire money is a terrible alternate currency to use because it’s tied to the dollar. You have 1 dollar of Canadian tire money it will buy you one dollar of goods. That doesn’t help when your one real dollar is buying less and less.

      If you wanted it to be of value you’d say the one Canadian tire bill will buy you one 2′ inner tube made by X manufacturer. That way it would not lose it’s purchasing power.

    • GreatWhiteNorth says:

      @larrymac: WooHoo Canadian tire money. At one time a birthday card full of it was almost as good as getting cash! The only downside is you can never get rid of that last 3cent bill… unless you donate it, give it to a kid outside the store…

      It has filled glove boxes, tool boxes, tackle boxes, kitchen drawers and wallets all my life! With that smiling Scotsman with his tam at a jaunty angle, scarf tied on his neck, big mustache and white hair with the huge happy grin!… Good lord I can see him clearly in my mind as I type.

  2. TheUncleBob says:

    Sounds a lot like the Liberty Dollar fiasco that ended in government raids…

    • kc2idf says:

      @TheUncleBob: . . . which raides have not yet been justified by the pressing of any particular criminal charges.

      The key difference, though, between Liberty Dollars and other community currencies appears to be that they Liberty Dollars have a suggested conversion to US dollars (e.g. $20) minted into the coin, with the implication of compatibility. Newer Liberty Dollars have added the acronym “MSRP” to indicate that this is merely a suggestion.

      Would I use in them? Probably not. It seems as though there is too much baggage. That said, it seems there is no harm in creating an alternative currency, and, quite honestly, using any currency is really just an enhancement to barter.

  3. twophrasebark says:

    When is Consumerist introducing Spidollars?

  4. Trai_Dep says:

    I wait patiently for Duvel Moneybuck, or The Fluffy as we locals like to call them.
    Best part: auto-10% discount with Starbucks’ tempting breakfast menu! Well, 1/4 of it, at least.
    Although, I’m running short this week – gotta check w/ the Moms to see if she can Fluff me up!

  5. Tim says:

    BerkShares are tied directly to the dollar (1 BerkShare = 1 dollar). So it is by no means sheltered from inflation.

    The principle behind BerkShare is local economy, keeping local money local. Nothing about inflation or anything.

    It’s also worth noting that Crane & Co., the company that makes paper for U.S. currency, makes the paper for BerkShares (the company is located in the Berkshires). Cool, huh?

  6. golddog says:

    I see alot more of these stories lately. Is our economy so bad that we’re devolving 250 years to Schrute Bucks and Stanley Nickels? These schemes just strike me as economic protectionism that nations are starting to engage in, just on a local scale.

    On the other hand, the way the USPS is going, maybe someone needs to start the Pony Express back up…

  7. moore850 says:

    If you want a metal-backed security, why not invest in and trade fractional shares of precious metals? That’s the same thing and it’s backed by the US Government dollar, meaning you don’t have your “fake” money in between and have to convert one way or the other. This strategy should help you be transparent about your fees, so that you’re not double-charging people as the go-between.

  8. I Love New Jersey says:

    I’ll just stick to hard currency like Canadian Dollars.

  9. carline711 says:

    Granted you can print your own currency and whatnot but my real question is why. One of the more dependable things regarding government currency is the ability to prevent counterfeit bills from flooding the market and ruining the money system. Even if you state that our currency has counterfeit bills, the government is actively trying to prevent this cause. I’m not aware of such technology (in practical sense) that one could employ that would prevent your currency from imploding upon it becoming too large and having counterfeiters run a muck.

    • MooseOfReason says:

      @carline711: Well, the Fed has flooded the market with “real” money before, in the 1920s. They caused the ‘Roaring Twenties’ and the great depression. Even Ben Bernanke, our current Fed chairman, admitted back in 2002, when he was a board governor.

      “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”


      In-depth look at how the Fed caused the Great Depression:

    • jamar0303 says:

      @carline711: Well, how does Canadian Tire do it?

  10. Inglix_the_Mad says:

    I’m hoarding black pepper and spices. I shall have the best backed (or at least freshest smelling) currency in the WORLD!

    (many people forget that for a very long time the price of pepper was equal to the price of gold per oz)

    • OGH!_GitEmSteveDave says:

      @Inglix_the_Mad: Might I also suggest futures in Tulip bulbs.

    • Trai_Dep says:

      @Inglix_the_Mad: Although such schemes are rife with unintended consequences.
      I still remember with sad regret the street wars that rocked the SF Bay Area. Mobs of black-clad Latt√©-throwing hipsters facing off against swarms of tie-dye wearing surfboard-jousting stoners on Market Street in the ’90s. And unfortunate outcome of The Patchouli losing value against The Humboldt Bud (speculators assumed the latter’s smokeability would hedge against the Bud’s inflation, failing to take into account hydroponics).
      The horror, the horror…

  11. zlionsfan says:

    I’m currently eating black pepper and spices.

    In about 24 hours I should have an idea of the exchange rate.

  12. Gtmac says:


    I’d rather go with the currency backed by precious metals. Phil Pesos sound too easily devalued. Gold can’t take steroids and Platinum doesn’t get damaged by humidity.

    Although…If you had a 5000 pesos bill with a picture of Nolan Ryan on it I’d consider it.

  13. HiPwr says:

    No need to hoard anything. The economy is going to be fine now that we have a fiscally responsible government.

  14. Brazell says:

    Quick, someone invite everybody who voted for Bob Barr, we have a discussion about alternative currency!!!


  15. Sarah Elizabeth says:

    Paul Di Filippo has a story about this – “Spondulix”.

  16. carline711 says:

    I’m putting my money in pumpkins


  17. Wombatish says:

    Ah the good old Gold Standard. And people wondered why I was telling them that Ron Paul was out of his flipping mind to bring it back.

    Gold Standard would just devalue the dollar, not actually solve anything.

  18. Michael Bauser says:

    Wait, I can base my currency on anything I hoard?

    “Bauser Bucks” are going to be backed by Marvel Comics and twenty-sided dice. Who’s interested?