Monday, October 3, 2011

Want To Ensure That The Money Earned In Town Stays In Town?

Nothing easier.
All you have to do is to establish a community bank.

And start printing a local currency.

In Cidade de Deus (the place where City of God was filmed, and a stop on Barack Obama’s South American tour this year) the banknotes are called CDDs.

In the little town of Silva Jardim, sixty miles north of Rio de Janeiro, they’re called Capivaris, after a pig-sized rodent commonly found in a local river.

And the ones in 62 other towns throughout Brazil are named after everything from the sun to varieties of cactus and even Brazil nuts.

Then you open a storefront that serves as a bank, where you freely exchange the local currency for the national currency at a rate of one-to-one. And, to make sure you don’t get into trouble with the federal government, you deposit the national currency in a bank, where it serves as a guarantee.

Next, you convince the local merchants to give discounts for purchases made in the new currency. The discounts apply to everything from haircuts to groceries, from clothing to electrical appliances. And they range from ten to twenty percent. With savings like those, all of the consumers fall into line and start exchanging and spending the local currency instead of the national currency. And the merchants quickly discover that the discounts they offer are more than being compensated for by increased sales.

The economy of the town benefits twofold: firstly by helping to ensure that money earned in the town is spent in the town, and secondly, by attracting people from outside the city limits who start flocking-in to exchange their money and start spending it. Most merchants experience an increase in revenue of some thirty percent.

Nobody has actually started counterfeiting the local currencies as yet, but as a safeguard, the banknotes all bear watermarks, serial numbers and holograms – just like the national currency.

The first ones were the brainchild of a social activist and former seminarian named Joaquim Melo.
He called them palmas (palms) and launched them in the mid-1990’s in a small town called Conjunto Palmeiras in the State of Ceára.

And they’ve been gaining currency (sorry, couldn’t resist) throughout Brazil ever since.

Leighton - Monday


  1. We have a similar scheme in the bustling town of Totnes in Devon.

  2. It isn't a surprise that this idea came from a seminarian. Christ had a problem with the money changers in the temple who were charging the people for changing their money so they could purchase something as an offering.

    Christians were forbidden to engage in banking, usury, because it stole from the people, it wasn't an even exchange.

    After gaining independence, the thirteen former colonies had thirteen currencies. The need for a currency that would be recognized across all the states became obvious when trade crossed state lines.

  3. So when does M.I.E. start issuing its own transnational fictional currency?

    No, wait--not worth the grief of deciding whose portrait goes on which denomination.


  4. This is a great idea that's been tried but not successfully, in the US, where the presence of large chains crippled it before it could get going.

    I sometimes think everything should be local, beginning with schools. And if we could keep things small, there'd be less loot at the end of the rainbows for professional prostitu- I mean politicians.

  5. Why do I sense something is about to go terribly awry? And, no, not (just) because bankers are involved. For the benefit of Lenny and Leighton, how can you expect everyone to keep with the scrip(t)?