Well...not quite, but the title is not completely misleading. The Libertarian Party is the only party (to my knowledge) that is taking a truly free market approach to money and banking by introducing competition and allowing the people to decide. Hayek would be proud, after all his “Denationalisation of Money” theory should be largely credited with our approach.
Most of us here know some basic Austrian Economic laws and theories, but what about the people of...say.... Dunster? Well, it looks like they are acting on Hayek’s theory whether they know it or not.
I was very surprised and intrigued to find this article on the BBC today, but it seems that increasingly people around the UK are starting to accept Euros as payment (not my currency of choice, but it’s a start). Although most of these people are accepting Euros purely to assist tourism, perhaps it’s only a matter of time before we start seeing transactions amongst one another is Euros.
"Traders there believe it has been a boost to the economy, so much so that they are looking to develop a banking system of their own."
Why is this so important? What does it mean? Well imagine it: the Bank of England announces “quantitative easing” tomorrow to “stimulate the economy”, inflating the money supply and taxing you (yes inflation is a tax!) for simply using their monopolised money...what do you do? Use Euros, or Yen, or Dollars, or whatever takes you think most stable and Mr. King can be left alone to bathe in his freshly printed pounds for all we care, whilst the rest of us could use them to heat our fireplaces.
Now I don’t know the ins and outs of legal tender laws, but I would have thought that accepting anything other than sterling would be against the law. Perhaps you can explain this to me.
Either way, it seems that the people are starting to see the benefits of competing currencies...imagine when we tell them it’s in our Party Manifesto.
14 comments:
Yes. We should all be able to trade in whatever currency we want to, or even barter in some cases.
I won't use the Euro out of principle, but if shops think they can get a few tourists last Euros, or some of our left over holiday money, then that should be their call.
but I would have thought that accepting anything other than sterling would be against the law.
I also thought this, surely as the Euro is not legal tender, they are acting as foreign exchange brokers / de facto Bureau de change , this is governed under FSA regulations, I know that as an Ex Forex broker ,I had to sign the BOE grey paper on money laundering. Have these shops signed this.
Who fixes their spot rate and arbitrates any deals that go wrong, what does your bank say when you start paying thousands of euro's in?
Criminals normally take a bit hit on washing their money, but hey come to the UK, buy high priced goods with your dirty Euro's, go home, sell goods for more than you paid or even at a small loss, bingo , clean money.
Considering all the pettifogging bureaucracy that blights our lives, I'm surprised that this has escaped notice, or perhaps it has not and it's a long term plan for Euro by stealth.
But the BBC seems to like it , so it must be a good thing, right?
Pavlovs Cat: it does seem strange that they have been allowed to do this, would be interesting to find out just how they did it.
Out of interest, do you still follow the FX markets? I just recently set up my blog based on elliott waves and am trying to get more experienced traders to check it out and leave some comments so that I can improve my analysing.
It's called "riding the tide", you can find the link on the lpuk blogroll on the right side. One thing I'm looking at now is the possibility of a dollar rally, will post that on there soon.
Hi Max
I'm afraid I got out of that a long time ago, while my liver and sanity were still intact.
Also I was not a trader merely a humble Forward $/£ broker and as the song went.
"I can't read and I can't write,
But I can quote two numbers"
The only time I take an interest in Forex now, is when people like the post office say 'No Commission' but quote spreads you could drive the Queen Mary through sideways.
hahahaha, tell me about it. The amount of times I have had to point out to my friends just how bad the Post Office is for FX.
No worries, I dont blame you for getting out. I have heard some pretty scary things.
I'd have thought the law is that Sterling must be accepted if offered as payment rather than nothing but Sterling may be offered. I have a vague recollection that a company I worked for years ago allowed some of its shops in tourist areas to accept foreign currencies, although the rate of exchange was such that any tourist willing to do it would need to be so daft that they'd probably have already spent all their money buying Tower Bridge and Buck House from conmen.
Love how the BBC's head article reeks of Daily-mail-esque vitriol; its so delicious it must be fattening.
A little worried about this though; use of the Euro; you could be seeing what you want to see Max, but like plans to privatise Royal Mail - a brilliant idea in the long run - the reality is this is probably just another long con, regulatory warfare from the EU to manufacture just this situation where normal consumers are shafting an uncertain sterling for the "perceived" strength of the Euro (sic).
Still we might all be doing this before long; Zimbabwe have recently embarked on pseudo-free market fiscal policy - it is not completely unrealistic to think that if the breadbasket of Africa can become a third world country with hyperinflation, maybe the sinkhole of Europe could too...
Here in Northern Ireland, many of the border towns accept Euros and there are no problems here.
People should be free to use whatever currency they like. If a currency is treated with disrespect and is inflated to the moon, why should be be forced to use it? A sound currency should continually earn its trust and therefore guarantee its use.
Of course, free banking and state issued money would help present Sterling as the option of choice.
The BoE has just pumped an extra £25 billion of new money on top of the £150 bn in quantitative easing already planned.
What perfect timing, just as we are discussing the idea of "sound money", the BoE demonstrates to us that they clearly have no room for discussion.
I guess a follow up article could be named "Goodbye Sterling, Hello Inflation"
Peter Schiff addresses this issue in "Crash Proof". He predicts a scenario where gold bullion transactions will become popular in countries where government has abused legal tender so much that it no longer functions as money. Google "gold for bread in Zimbabwe".
Legal tender is clearly defined as that which can bu used pay off debts and nothing else. This is why the local garage can refuse to accept Scottish notes and £50 BoE notes.
http://en.wikipedia.org/wiki/Legal_tender
I remember proposing this solution when we had the debate about whether or not to join Euro. If it was such a good idea then it will happen anyway so why take the risk?
This post and the recent increase in QE has made me think about switching some of by savings into Euros. A few years ago I bought about £5k worth @59p and sold an 67p, boy am I kicking myself now!
I would have thought that if you are a libertarian, the whole idea of "legal tender" would be anathema.
Why would human beings trade in a currency that was being debased, unless they are forced to? remove the threat of force, and the "problem" of debased currencies would fix itself
Brassbanjo
@brassbanjo: yes, the legalization of competing currencies is a key point. That's why you'll find it in the LPUK manifesto under "monetary reform".
Rather belatedly, can I point out that, in Israel, which I visited last year, nearly all traders would accept Israeli shekels, US dollars, euros, or the pound. They either had conversion tables or conversion programs on their tills or would do the calculation in their heads.
As the Arab manager of our hotel said, "we don't really like the euro, but we accept it." I was able to assure him that a lot of people in England didn't like it either.
It's all money. If the Israelis can do it, why can't we?
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