From: Larry Manuel <[email-masked]>
Date: Sun, 15 Sep 1996 14:42:27 -0700

Re: interLETS exchange
On Sun, 15 Sep 1996 Rob Squires wrote:

>2)Create a new unit of currency which is neither equivalent to the pound, US
>dollar, AUS dollar or any other.  I am not sure how such a currency could be
>arrived at.
>
>Any input ?
>
>Rob.

A practical way to create a new unit of account is to specify
an exchange rate on a particular day and the rules by which prices
or exchange rates will change after that day.

For Alta California Ecological Money Units (emus)
the exchange rate was set at 1 emu = 1 troy oz. silver (= $4.80 U.S.)
on 1 January, 1995.  This made a connection to the historical
common law precious metal unit (troy oz. silver), corresponded
roughly to the minimum payment for one hour of labor in the
industrialized areas of the world on that day, and serendipitously
had a conveniently round number for the initial exchange rate
with the U.S. dollar. [8 cents U.S. = 1 minute labor (minimum payment)]

The rules of change are (roughly) that the average earnings of labor
(seasonally adjusted) in industrialized areas should remain constant
when specified in emus.  This labor-based evaluation means that
the long-term prices of tangible commodities will constantly decrease 
because of technological advances (including gold and silver).
Labor-basing allows the practical use of antiusury principles
specifying zero interest within strongly bound communities.

Because the most readily available figures are for labor costs to
corporations rather than payments to laborers, making calculations
a little difficult, and inflation has been relatively low recently,
the practical exchange rate against the U.S. dollar has tended
to stick at 1 emu = $5 U.S.

To have a really rapidly adjusting unit would require creating
a banking institution that would have the resources to do
the statistical analysis frequently and to adjust a set of prices
of standard commodities for which the emus could immediately
be exchanged.  If 10% of the value of the units were backed
by warehouse receipts for these tangible commodities and 
the other 90% by a lawful obligation to pay from future production,
these units would be more secure than the common international
fiat currencies.

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 *larens imanyuel*

 University for the Earth                [email-masked]
 2155 Acton Street, Suite 3                  Tele: (510) 548-5238
 Berkeley, California, U.S.A. (94702)

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