Imagine a World with No Fiat Currency? Here it Is…

by Darwin on February 15, 2011

There’s a rather interesting video from this Dutch big thinker floating around the web where, among other things, he espouses his vision of a world where we have various bartering systems set up that relegate dollars and cents to the trash heap and rather, groups barter amongst themselves, realizing a multitude of benefits.

Bartering Schmartering

Now, we’ve all heard of bartering before and I usually laugh it off as some silly relic from the old days when a blacksmith would trade some horseshoes for a jug of milk.  After all, how many different wares or talents could you even think up right now that you could realistically barter for?  And how many would you want?  But what made this idea interesting was the notion that items and services would have a sort of currency of their own, or “point system” which would greatly increase the utility of the system.

In listening to this guy, he’s one of the currency perma-bears who hates the fiat currency system and thinks eventually, the western currencies implode (my interpretation).  Hence, physical assets like gold and silver are the only true currency.  So, his bartering system would allow you to exchange the points you earned for precious metals in small denominations.

Practicality Please?

You’re probably scratching your head wondering what I’m talking about.  Let’s say you offer a service – handyman/repair.  You charge $50 an hour.  You only get booked for about 30 hours a week so you have bandwidth to take on more.  You’d take on as much work as you can get but you don’t have people willing to pay you that much locally.  There are others with goods and services of their own that you’d like but you don’t have a lot of excess cash to buy what you want.  So, you offer up your services for whatever points you can get, sell your services to this network and attain points.

The beauty (I think) is that:

a) There do not appear to be any tax implications, so right off the bat, you’re talking a net 30-40% benefit if excluding all federal, state and local taxes [I can hear the IRS studying this one now]
b) It opens up new/expanded revenue sources for typical Americans that didn’t exist previously
c) You’re not subject to the constant devaluation of your local fiat currency since you can redeem your points for hard assets whenever you like.

OK, I may not have explained that well at all, but use your imagination.  I’m sure you could conjure up hundreds of things in your home, services, your time, other goodies you could sell, and be part of such a community – if only someone would get around to setting a legitimate one up near you!  The sites he links to in the Youtube video are actually dead, so maybe bartershares isn’t off to a running start just yet.

Interesting Idea?

{ 2 comments… read them below or add one }

101 Centavos February 16, 2011 at 8:27 am

Interesting enough. The idea of Alternate currencies is not a new one, and may gain wider acceptance as fiat currencies seem to be on the path of relentless debasement. American Open Currency Standard is one system that is gaining traction. Ithaca Hours is the other one that springs to mind. I’m making a lazy prediction that we’ll also see a currency backed by metal stocks at the London Metal Exchange warehouses. Tin, copper, nickel, aluminum…. all have some type of value.


Roger, the Amateur Financier February 20, 2011 at 1:12 pm

Hum, interesting concept. Sounds similar in principle to the local currency ideas I’ve heard various cities taking up. (Where cities will create a separate, parallel currency and use that instead of, or in addition to, your typical US dollars and cents.) I’d be more convinced about how well it would work if I saw more successful, lasting examples, but perhaps there will be more in the future.


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