Town to issue own fiat money which can be used in stores that wish to participate.
Exchange rate is tied to the £ so it’s like printing more £ of a special type that can only be used in a few shops.
This is actually not fiat money in the full sense because shopkeepers are not forced to accept it, they can choose whether to participate in the program or not. Neither is it money with intrinsic value. Somewhere between…
Money supply inflates so prices in those stores are bound to go up, or, perhaps, it prevents a long overdue falling of prices - essentially the same effect.
5.It will create the illusion of a higher productivity. However. Shops that participate will lose because a good amount of their income will be in a currency of very limited use. Other shops will lose because they will lose those customers who have access to this new money. Customers lose because of inflation. Customers who have access to this money win in the short run. All in all, it looks like a classic bubble and will provide most likely a spectacular boom-bust cycle. What do you think?
Manifesting this kind of individual and community freedom (“Choice in Currency”) freedom, (as F.A. Hayek put it") is going on all around the world. If you do believe in a free market and freedom of choice then there should be no problem with this. Please see www.reinventingmoney.com
I think it’ll have the same effect as gift cards. It will make for nice holiday gifts from relatives who know you love your town but are unsure of what corporate superstore you shop at.
Given that the money has a fixed value with existing fiat money but isn’t required to be taken by merchants or creditors, it is “over-valued” in the market. It’s price fixing. You can’t tell people that two things that do different things have the same value. Why accept “money” that might not function as money depending upon your wants over the established fiat money if they have equal purchasing power (where accepted)?
In other words, it won’t become anything more than a novelty.
Sounds right to me. Traditionally, money is the most-commonly accepted commodity, so there will be little reason to use this new currency except where it provides some benefit that the traditional currency can’t provide.
Goverment should get out of the money business. This type of thing is a futile attempt at imposing a weird protectionist scheme at best and at worst a local inflation tax on their citizens. The best thing that can happen is that this idea dies. If successful, the local government will eventually realize that they can print slightly more of their currency relative to the pound and pocket the money.