Author: Michael

Here are two things I read today about money. First the bad news via Bill Bonner’s Daily Reckoning newsletter…

The U.S. Treasury Department also comes up with a number for how much Americans actually owe, thanks to federal deficits. Are you sitting down? It’s a chunky number: $750,000 per household. That’s what you get when you take the total commitments of the feds – $49 trillion -and divide them by the number of families.

The Financial Times goes on to note that it took 204 years for the U.S. government to accumulate its first $1 trillion in debt. Now, it adds that much every 18 months. George W. Bush has added more debt than any president who ever lived. In fact, he’s added more debt than all the presidents who ever lived…combined.

…and then the good news, via Penny at BALLE-BC, an excellent (even nine years later!) YES! magazine interview with Bernard Lietaer, usually credited as the architect of the Euro…

…in France, there are now 300 local exchange networks, called Grain de Sel, literally “Grain of Salt.” These systems – which arose exactly when and where the unemployment levels reached about 12 percent – facilitate exchanges of everything from rent to organic produce, but they do something else as well. Every fortnight in the Ariege, in southwestern France, there is a big party. People come to trade not only cheeses, fruits, and cakes as in the normal market days, but also hours of plumbing, haircuts, sailing or English lessons. Only local currencies accepted!

I wonder if we have any such currency communities springing up around Chicago… and what gifts, skills and goods I might offer in such exchanges. What good will fancy clothes and advanced degrees be in these local marketplaces?

UPDATE: Lietaer in Ode Magazine, as well.

UPDATE: more on money beyond peak oil

My last post posited the possibility of investing in people and relationships as the new gold. In the West, I think we tend to devote ourselves to amassing personal stocks of money and assets, emphasizing our piles of toys, house, stocks, and gold over the care and feeding of our webs and flows of connections, our people, the other gold.

Since I wrote that post, I’ve discovered the story of Martin Macy, in the San Francisco Chronicle. Here’s a guy who worked 41 years as the mail delivery guy in a bigger and bigger law office. Over the years, he became renown for his devotion to his co-workers, the firm, and to kindness as practice, the kind of guy who reports to work at dawn and brings doughnuts for the lawyers pulling all-nighters. When he was canned for efficiency reasons, some of his old friends and colleagues got together and are well on their way to creating an annuity that will support him for the rest of his life.

Invest wisely!

I’ve been reading the mania about gold. In the last couple years, gold stocks, funds and the real stuff have rocketed upward. Gold now trades at a 25-year high. Now what?

When some of us were musing about a new rush for gold in the year or so after 9/11, I wondered why anyone would buy it. Can’t eat it and can’t burn it for fuel. I saw the relatively self-sufficient farmers I knew as really having things figured out. They knew where food came from. And heat. With those two things come health and hearth, family, neighbors, and the rest of what sustains life. Buy farmland, and learn to use it. Now that’s real security, or so it seemed to me then.

Now, in one of these gold newsletters, I catch this as justification for the meteoric rise of metals prices: “…people still need something to trust.” Isn’t that interesting? So I understand all the economics of these markets. I understand why the dollar will decline, why Saudis and Chinese and others will buy gold instead of some other fiat currency. I understand the history of gold as money. But how do we know that this isn’t just the next big inflationary mania, except that the supply of gold grows slower than the supply of paper money, dot.com stock options, and two-bedroom condos. Can we ever find real security?

No matter if the dollar crashes, gold is still worth something. It’s more real than other fiat (faith-based) currencies. But there’s just not enough of it to go back to the gold standard is there? And no way to go back further to gold coins in the marketplace. How will I use gold to buy bread?

Looking ahead then, it seems gold can only be another mania. And then, what to trust? Perhaps if we finally discredit the ultimate stock of wealth, we can get on with focusing more clearly on the flows of wealth. What will each of us do in the next several years, for the people right here in our own neighborhoods, that will secure our retirements in human-scale and personal ways?

Might these bubbles in tech stocks, bigger emptier houses, dollars, gold, pension plans and the rest of wealth accumulation make some sort of opening to trust in the flow of energy, rather than the stocks? Might we rediscover how to move in local community markets, and trade that in for what we have learned to grab in global financial markets?

One of the things feeding global gold prices are exchange traded funds, which allow small investors to buy gold bullion in lots of 100 shares, like we already buy stocks. So what would a similar investment vehicle look like at the community level? What would make precious, but hard-to-deliver, stuff like healthcare and education, more easy to invest in? How might we structure a mania in community assets and investment?