Food-backed Local Money

I thought this evening's Campfire post might connect well to Gail's article this morning. If the financial system is at a risk of collapse, and if so many of our basic goods depend on the financial system, then what, if anything can we do to be more resilient to economic shocks? Below the fold is a description of a project I am working on that may provide some answers.

Image 1. Front and back sides of a Mendo Credits slip. Our first printing of Mendo Credits was for 600 notes sold at $10 each. Proceeds from the sale of Mendo Credits allows us to purchase 8000 pounds of grains and dry beans. Mendo Credits are 100% backed by specific quantities of pinto beans, triticale, and white and brown rice.

As a kid did you ever fantasize about Monopoly game money becoming real? I know I did. Perhaps that’s why I left the printer shop the other day with a sense of bemusement. I had just designed and printed $6000 of money called Mendo Credits. I felt confident that people would accept it, and I also proudly considered that Ben Bernanke doesn’t make money as good as this.

Now before you call the Treasury Department to report me, listen to my story. It may sound funny, but the reality of money is deadly serious. This is perfectly legal and I want you to play copy cat.

Rethinking Food Security

Most institutions, such as food aid NGOs or the US Department of Agriculture, express concern about food security in terms of the ability for low income people to purchase adequate food. This is a valid way to think of food security. If food prices are high relative to income, or if other compelling expenses such as housing, health care and transportation also require a large portion of income, then securing adequate food on an individual or family level will be problematic. Programs that disperse food to the needy, redistribute income through tax policies, assist with the high costs of non-food expenses, guarantee a living wage, etc. all address distribution inequity and are laudable.

But the question I want to ask is whether they are now sufficient? Two unspoken assumptions underpinning the framing food security narrowly as an “income problem” require rethinking.

The first assumption is that enough food can actually be grown and delivered to wherever it needs to go. A study of the intersection of supply limits to water, energy and topsoil combined with climate change should dispel the notion that food abundance can simply be taken for granted. Over 90% of transportation relies on oil, and extraction of oil appears to be entering a permanent global decline. The fuel cost spike of 2008 severely hampered food distribution in some parts of the world. Cheap transportation, which permits food to be grown thousands of miles from where it is eaten, stored in centralized facilities, and delivered daily to where we live, shouldn’t be taken for granted either.

The second assumption is that the money we have now will remain a reliable medium of exchange that enables a smooth flow of production and distribution. Few people realize that most money comes into existence through bank credit that is backed by the borrower’s debt and any collateral. Banks don’t actually have money to lend, they simply decide who is “credit worthy,” and for how much. After a borrower signs the loan documents the bank creates the corresponding money in electronic accounts, such as a checking account. Credit and debt are therefore “flip sides of a coin.” People receiving bank credit are in debt to banks, but, correspondingly, banks are in debt to people for all the deposits on hand. When too many loans default, banks are at risk of defaulting on their own promise to maintain the savings of depositors. This is why credit dries up as debts go bad: As debts are cancelled through bankruptcy then a corresponding level of credit must disappear also. In the present banking system it is mathematically impossible for all loans to return their principal plus interest without a constant expansion of debt/credit. But a system that depends upon unending growth eventually ends. The actions of the Federal Reserve to re-inflate the reserves of the banking system are a desperate attempt to fix something that is permanently broken. Unfortunately, the systemic problems are deeper than the surface actions currently being taken by the Federal Reserve, The U.S. Treasury and the U.S. Government. When I think of the global financial system nowadays what comes to mind is the "Humpty Dumpty" rhyme. Knowing that the debt-based money system we currently rely on is failing, we created Mendo Credits to function without debt or interest.

Food-Backed Local Currency

The money I had printed was created with all the above-mentioned issues in mind: wide income disparity, lack of practical self-reliance, unsustainable agriculture, resource depletion, climate change, a fragile just-in-time delivery system, a failing money system, and rising unemployment. When I said that “Ben Bernanke doesn’t make money as good as this” I meant that today’s dominant money actually creates or exacerbates those troubles, whereas Mendo Credits can be part of their solution.

Along with several other people, I am working with Patty Bruder and Cyndee Logan of a local non-profit called North Coast Opportunities (NCO). NCO mainly provides social services, such as running preschools, senior support, and managing community gardens. Mendo Credits is a new food-backed local currency project partly funded by a grant from the California Endowment. The overall goals of the project are to improve community health, economic vitality and environmental sustainability through local food system development. For as long as I have known Patty and Cyndee they have been thinking about the importance of system change and practical self-reliance. They’d prefer to develop a community garden where low income families can grow their own food rather than hand out meal money.

Image 2. The farms package our orders in what are called 1-ton totes, which are large bags moved on wooden pallets. For comparison, an entire hopper car load would be about 12 tons. A local business that does nearly daily trucking to the Sacramento Valley currently transports our food to their warehouse space, where it is also kept pest free using rodent traps. The warehouse tends to stay cool, but we will have to worry about insects during the heat of summer. We have a commercial scale and household storage buckets available. From left to right: Cyndee Logan, Mike Adair and Patty Bruder fill and weigh buckets in preparation for a distribution day.

Historically in the United States and elsewhere, local currencies are known to stabilize local economies when national currencies are troubled, such as bouts of hyper inflation or deflation and joblessness. This works because those accepting local money are also likely to seek out others who accept it too, creating a social dynamic that forms new, local economic associations. As these strengthen, the flow of local money picks up and work can get done even in the face of economic disaster outside the community. Because they can only be spent locally, profits on economic transactions done with a local currency remain in the community and spur more local investment. Local governments, regional business associations, community banks, and worker cooperatives are examples of the kinds of institutions who tend to successfully issue local currency. They have the social capital to be broadly accepted, and the capacity to manage the task of issuing and redeeming money.

Image 3. A great way to spread awareness of the many issues confronting us is by spending Mendo Credits into circulation. The acceptance of money is largely a social phenomenon, and it is too early to say how well Mendo Credits will be recognized as a local currency. On the several occasions where I have tried to so far, I have had no trouble paying individuals using Mendo Credits. For example, the printer of Mendo Credits asked for payment in Mendo Credits. In the example pictured above, my friend Michael Foley opens his wallet to redeem Mendo Credits for food. He is handing over the same bills I paid him for custom tractor work four weeks earlier. Pending sales of rice and beans to a local burrito shop may mean they will begin accepting Mendo Credits for prepared food.

Mendo Credits are backed by a tangible asset. In other words, Mendo Credits are a “reserve currency” as opposed to a “fiat currency” like Federal Reserve dollars. Many people are familiar with money backed by gold, which was once the case with U.S. dollars, but Mendo Credits are backed by reserves of stored food. Our reserve currency has a number of desirable properties at this time in history.

The asset value of Mendo Credits remains stable over a significant time period because we lock in an exchange rate for specific quantities of food for one year from the date of issue. Whereas gold and silver are inedible, Mendo Credits can be redeemed for the sustenance of life. When you hold a Mendo Credit note, you know it represents the quantity of food printed on its face and, if you want or need to, you can actually get that food.

Mendo Credits help with our goal of greater community self-reliance by directing investment towards essential long-term capital. For example, if a small grain silo costs $5000 to build, credits can be issued with prices that reflect both the cost of grain and storage. Eventually, local farmers could be contracted to supply grains and dry beans to our silos. Our land base would then have higher value and be able to support more jobs.

Image 4. People redeem Mendo Credits for food in downtown Willits, such as the Community Center pictured here. As our stores become depleted we can decide to issue a new batch of currency. Profits from previous sales plus income from the new Mendo Credits can form the capital to buy more food and replenish our stocks. We encourage household storage and consumption so that the population has their own food buffer and we can expand our capacities.

Currently we buy grains and beans from farms about 150 miles away, which is as close as we can locate. These farms are organic and family owned. The point is that we can decide to support agricultural best practices and once we establish relationships with farmers and become significant buyers, we can seek improvements when warranted.

Our goal to move product aligns with the needs of households to be financially frugal and eat healthy foods. We are selling organic grains and beans at lower prices than in stores, and are developing informative guides for preparing meals around whole and seasonal foods. Our guides also help families assess how much they eat to decide how many Mendo Credits to buy and whether they want to store significant amounts in their home. Emergency preparedness is enhanced as more families buy in bulk, habitually eat, and restock their food stores.

Image 5. Mendo Food Futures is developing guides for using wholesome, locally grown and potential storage foods in everyday meals and snacks. For example, make your own energy bars with minimally processed grains, toasted nuts, dried fruit and honey. No baking or refrigeration required, and almost universally loved.

Mendo Credits in Practice

When I told my friend Sara about Mendo Credits she beamed with delight, opened her wallet, and showed me an UDIS. A Honduran food and farmer cooperative, COMAL, issues its own local currency called the UDIS for many of the same reasons we started Mendo Credits. It was great to learn that these same ideas had already taken hold elsewhere and have a record of success.

Mendo Credits are just beginning to circulate in the town of Willits, CA and we hope this spreads around our region. Four central downtown businesses are serving as sales outlets for the new currency: The Bank of Willits, Mendonesia Café, The Book Juggler, and Leaves of Grass Bookstore. NCO also sells them at the Willits Farmers’ Market.

Image 6. Four downtown businesses sell Mendo Credits. Pictured here is Bank of Willits President Richard Willoughby, who proudly sells Mendo Credits and calls them “real money.”

A local business is currently assisting with transportation and storage. Their truck picks up from farms in the Sacramento Valley and hauls one ton totes on pallets to their warehouse. We transfer from the totes into 3.5 or 5 gallon buckets and take these to a convenient downtown location for distribution. To make it quick and easy to distribute grains and beans, we only sell in specified increments as given on each Mendo Credits slip. For example, 11 lbs of rice can be redeemed for a single Mendo Credits note. We have several buckets of rice to distribute from, each one containing about 40 lbs of rice. When a customer wants to redeem a note for rice, we can place their container on our commercial scale, zero the readout, and pour out 11 lbs.

Mendo Credits are a 100% reserve currency with each note representing some fixed quantity of food. Therefore, the Mendo Credits brought to us for redemption are moved out of circulation. However, redemption of Mendo Credits signals a potential demand, which allows us to issue new notes. We have to watch our supplies of grains and beans and estimate future demand. At some point before all our current food stores are claimed we will issue more Mendo Credits. A combination of profits from previous sales plus the income from new notes, which may not be sold out yet, can go towards buying more food supplies.

This is a small beginning but we are already looking at what it would entail to expand Mendo Credits significantly. We have cost estimates for building large silos along the railroad tracks, for example, and are actively raising funds for several small silos in the meantime. The investment required is substantial, but compared to what our society typically spends it looks like a bargain. For perspective, the storage capacity to hold enough grains and dry beans to feed the Willits area (about 14,000 people) for one month costs $120,000. A half million dollars would build the silos, fill them with food, and give us the peace of mind of a one month supply of food for the community, and potentially spawn a revitalization of the local food system, including jobs in farming, food processing, waste recapture, and transportation.

Image 7. Willits is geographically rather isolated, and local officials are concerned about food security with respect to transportation failures. No significant food storage exists in the area, with surveys showing less than a week of food in grocery stores. County Sheriff Tom Allman says a major earthquake could easily isolate us for a month. Patty Bruder (left) and Cyndee Logan (right) of Mendo Food Futures discuss the possible placement of grain and bean silos on City of Willits property adjacent to railroad tracks with the City’s Community Development Director Alan Falleri.

Initial enthusiasm suggests that Mendo Credits will begin circulating like cash within town. However, since the supply of Mendo Credits is limited to the supply of grains and beans in storage, they can’t become a dominant means of exchange until our local economy has very large storage facilities and is on its way towards food self-sufficiency. In the meantime, they are a fantastic educational device and may spur investment towards local food security.


A good introduction to local currencies can be found online at: and Big Gav wrote a nice article about them too:

Treating food security as an income issue is evident by questions in this survey:

For further explanations of how our present financial system works see: and

An article in English about the UDIS can be found here:

Energy Bar Recipe

• 1 cup finely chopped nuts and seeds
• 3 cups rolled oats
• 1 ¼ cups dried fruit, half finely chopped (size of small raisin or less) other half pureed.
• 1 ½ cups cereal
• 1 ½ cups water
• ¾ cup honey
• ½ teaspoon salt
• 3 tablespoons vegetable oil
• 2 teaspoons of seasonings (e.g., vanilla extract, cinnamon, etc.)
Lightly toast the nuts and rolled oats. Combine toasted nuts and oats with chopped dried fruit. Boil water, add cereal, stir and then let sit for 3 minutes. Mix pureed fruit, honey, oil, salt and spices into hot cereal and keep on low heat for 7 minutes. Combine all ingredients, press into ca. 9 x 13 inch pan and let sit for 3 hours. Cut into bars and store in covered container.

I love you, Jason Bradford!

Thank you, thank you, thank you.

Fabulous post, Jason.

I seem to remember that some (many? most?) alternative currencies in Argentina that arose after their currency collapse had trouble with counterfeiting. I imagine for this run in Willits it's not so much of an issue (that quantity of issued currency is small) but should the program grow it might become an issue. Have you thought of that and how do you plan on handling it?

I was just loaned a CD called "Coming Home: E.F.Schumacher & the Reinvention of the Local Economy". They also printed a local currency and it was very pretty. They might have suggestions on finding a printer who can handle high security printing.

Some governments print currencies for smaller nations around them. I know the Korean Government printed currency for several small Asian nations. Perhaps one of these contract printers could do the job? Or perhaps a printer who can handle bank checks etc. Here is one in Minnesota

My family issued script from our dry goods store.

The key is knowing your customer base.

Script will always be temporary until local government
is restored.

Not necessarily temporary. Some local currencies last a long time. Even during times of economic good times.

I am interested in hearing more about your families experience. When, why and how?

during the Panic of 1907 and then during the 30's.

My family since the Civil War, Ark/OK/TX, has basically
been as banker/insurer/broker.

Always unofficially with the three categories above.

Slicing off the profit as intermediary between
the three above and our customer.

Never get greedy is the key. Always have the cash
on hand (from whatever gov't is in charge).

Only as gov't cash disappears, as in 1907, does script come in.

With the mercantilist's signature on it.

And make it so that the counterfeiter thinks it's a waste
of time to copy.


This is fascinating...what do you mean by "make it so that the counterfeiter thinks it's a waste of time to copy."

How did your family accomplish that?

"make it so that the counterfeiter thinks it's a waste of time to copy."

That it takes more time to "set up shop"-overhead,
then distribute the "currency", our script

and the take will be limited as our "inventory control"
would immediately see the surge in script.

What I'm saying is keep everything local and familiar.

Script was always seen as stop gap until the local
gov't's currency kicked back in.

The economy we live in is a rigged game, established around the time of the Renaissance in order to promote the welfare of early chartered corporations and the monarchs who gave them license to monopolize world business. Until that time, there were many kinds of money in use simultaneously. People used centralized currency to conduct long-distance transactions, and local currency to transact on a more day-to-day basis.

Most people, in fact, never used centralized currency at all. They simply brought their season’s harvest to a grain store, then got a receipt for the amount of grain they had deposited. This receipt was currency, redeemable at the grain store for something everyone knew had real value. but since a certain amount of grain went bad or was lost to rats, and since the grain store had some expenses, this money lost value over time. Since the money would be worth less the following year than it was worth that day, the bias of the money was towards spending and reinvestment. That’s why medieval towns built cathedrals: as a way of investing in the future with excess money from the present. They were that wealthy. Women were taller in medieval england — a sign of their good health and diet — than at any other time before the last two decades.

The paper we are using is the same kind used by printers of banking checks and pharmaceutical prescription pads. It has some built-in protection but is only one line of defense. We do this plus give each note a unique serial number. Those are the cheap options. It gets more expensive to do more than this, but may be necessary if we expand significantly. Berkshares are a good example of high quality printed local currency. I made these using PowerPoint...I kid you not.

Re counterfeiting: You could contact Paul Glover at IthacaHours ( ), . I believe their bills are more resistant to counterfeiting than U.S. dollars.

Do you have any contingency (or "insurance") in case a large quantity of food gets ruined through some disaster?

I believe the answer to your question is in the picture. Read the last line of the back of the Mendo Credits bill.

The reverse of the "credits" indicates the answer is NO.

So, the "credits" are more worthless than worthless "Federal" Reserve Notes.

So, the "credits" are more worthless than worthless "Federal" Reserve Notes.

'could be' would be more accurate than 'are' and so far the food seems to be holding up. Faith is one of the biggest components of any currency, straight up barter is the only other option. 'Gold backed' requires faith in the value of gold, and that can drop precipitously when food is hard to come by. 'Ammunition backed' would require trust in those who stockpile the ammunition. I think I would put trust in those who warehouse food much more readily.

Some of the more successful local currencies of the past did have assets backing them at their outset, a European coal mine comes to mind as having issued a trusted note. The Mendo system seems to get cash up front and then backs the currency with food as quickly as it can. The trust will have to be in the volunteers keeping everything going unless the Mendo can, in time, make enough profit to back itself (have debt free food in hand before new Mendos are issued), but I couldn't tell if that was at all intended.

From my seat this looks to be an extraordinary effort regardless.

Mahalo Jason

If you want to expand, one approach is to encourage others to produce food, and issue the credits in payment.

In ancient Egypt people had to store their grain at government granaries, and when they brought it in were given a receipt. Whenever they were hungry they could bring the receipt back and get the grain back. Thus, the receipt came to act as a currency, with people accepting it in exchange for non-food goods. Many countries have had gold or silver-backed currencies; this was a food-backed currency. It encouraged people to grow lots of grain. As a result, Egypt became the breadbasket of Europe, Rome couldn't have existed as an empire without it; once the Romans took over and instituted their coin system, grain production declined.

You could do the same as the ancient Egyptians. Anyone could bring in food to the warehouse, and be issued currency for that food at a preset price. Of course it would have to be only preserved food - dried grains, pickled vegetables and the like.

A second feature of the ancient Egyptian system was that because grain got eaten by rodents, turned mouldy and so on, the receipt was stamped with a date, and the amount you got back declined over time. For example if you brought 100lbs of grain into the granary in January, they might only give back 95lbs in February, 90lbs in March, and so on.

That the value of the currency depreciated encouraged people to spend it quickly, or use it to pay any taxes or fees early rather than late.

A third feature was that the government calculated the rate of decline of grain stores, then added the same amount again or more as the rate of decline of the currency. For example if the grain actually disappeared at the rate of 2lbs in every 100lbs each month, the receipt would have it decline at 5lbs in every 100lbs each month. The 3lbs difference they used to issue their own extra currency to pay their workers. This is effectively a tax, and it answers the question of "if everyone is growing food, how do we get teachers and roadworkers and doctors?"

This sort of currency system has the effect of smoothing out the effect of booms and busts in food production. In boom times, people bring in lots of food and get lots of currency; in bust times, they spend their currency to get the food back. So while the economic boom/bust remains (the supply of currency changes), nobody goes hungry in bad times.

A system like this would expand your credits system quite a bit. It also decouples it from the general money system. At the moment your system is just a parasite on the dollar, it's not a separate and self-contained system.

What you are describing is the long-term thinking behind this. Thanks! It is very similar to how the UDIS operates in Honduras.

The term used for a currency that has value erosion over time to encourage its use is demurrage. We do this by dating each note for a year and then honoring redemption only at the newer prices after that time. Keeps our calculations simple as we start out, but is the same principle you discuss.

Zimbabwe bank notes have an expiry date on them, and people run to the shops as soon as they get their pay because they want to spend their money as soon as possible, since the value drops very quickly.

Not sure that it stimulates the economy though.

Zimbabwe issues a fiat currency. Mendo Credits are backed by assets and can't be inflated and hence loose their value. However, because grains don't last forever, a bit of demurrage encourages redemption and keeps supplies fresh (in theory).

If one spends time reading about money - the topic of velocity gets mentioned. And yes, there does seem to be a value to 'spending it as soon as possible'

I hadn't heard of UDIS, thanks for pointing it out to me. It seems that it does actually work to encourage food production and improve food security. That's something which is not very important in the modern-day West, but may become more important over time as peak fossil fuels and climate change kick in.

Having a food-backed currency (depreciating or not) encourages local production of foodstuffs. Backyard gardens helped many a Russian or Hungarian family survive "the Transition" as they called it, but they're not so common in the West. Having a currency value attached to it could encourage it.

Also, already many farmers in the West have someone in the household whose non-farming job subsidises the farm. So they're really on the edge financially, and whether they'll still be doing it next year is an open question, they might just give up and walk away. Having a guaranteed price in a local currency would I imagine help tilt them to the side of staying.

I want to point out that about 10 people are working on this, 3 of us quite a lot. I happen to be the guy who finds the farmers, designs the money, and does a lot of the writing and public outreach work.

With respect to the farmers, I talk to them about their prices. I have told them, "Look, we want to make sure what we pay you is fair. You have to stay in business or we don't have your food. So, you may be looking at the commodities market to decide how much to charge us, but we also want to let you know that if the commodities prices go below your cost of production please tell us so and ask for a fair price. Our duty as eaters is to make sure you can be a good farmer. Likewise, if you know we are a good customer, do us a favor and if the commodity prices get extremely high because of speculation don't pass on unreasonable charges to us."

Another example would be ancient Japan. Although no longer used as such koku was originally defined as a quantity of rice, historically defined as enough rice to feed one person for one year. Gold & silver coins had a value directly related to Koku.

I love you also Jason (in a brotherly way of course) but am also wondering about counterfeiting issues.

Will start learning and planning to get something similar happening locally

The U.S. will eventually hyper inflate, probably within three to five years. Wealth will be destroyed and debts will be inflated away. The preferred medium of exchange will be gold and silver U.S. coins. Gold jewelry will also be accepted.

Lacking those, other means of exchange will be food, medicine, soap and toilet paper. I personally like fertilizer, but an ounce of gold is worth two or three tons of fertilizer. Gasoline will be valuable, but dangerous to handle and store.

Barter coupons worked for a while in Argentina, but eventually they became worthless.

I believe that the gold standard would have prevented this crisis. It would not have allowed us to run a negative trade balance, meaning that we would still have basic industry. We would not been able to become dependant on oil imports.

F.D. Roosevelt led us down the path to destruction by calling in most gold by Presidential Executive Order 6102 in 1933. Private citizens were allowed $100 in gold coin, which was about 5 ounces. Gold was then revalued from $20 to $35 per ounce. The dollar is defined by weight in gold and silver in the U.S. Constitution. I am not a constitutional lawyer so I do not understand how legally this was done on a long term basis without amending the Constitution.

The US dollar was redeemable in gold to foreigners at $35 until France refused dollars and demanded gold, threatening the reserve at Fort Knox, until Nixon took us off of the gold standard.

The system encouraged the behavior that led to the crisis. Savings are subject to inflation, interest income (less than inflation) is taxed and interest paid is deductible.

I am not talking as a “gold bug” but as someone who has read about economic collapse.

"an ounce of gold is worth two or three tons of fertilizer"

If and when we get to that point, gold will be worth only what you can trade for it,

in some cases it may not be much. how does one know if it is real gold or not ,or how pure it is, or if it is counterfit ???

Coin dealers and collectors can easily spot fakes. Also, gold is a super dense metal, and the weights of coins are known.

There are test kits for gold jewelry that aren't usually used on coins. Even in ancient times gold purity could be told by rubbing it on a touchstone.

Gold will always have value. Always has.

Gold wasn't worth very much after the Spanish looted South America, which led to their decline in Europe. During the California Gold rush, food and alcohol where worth more than gold.

Aluminium used to be worth more than gold: the best guests at Napoleon III's banquets were given aluminium plates while the less distinguished guests were only given gold plates.

A currency based on food is a bit odd, as the food supply varies from year to year, depending on weather conditions, pests, population changes ...

In times of plenty the food is stored up, in hard times the storehouse has its stocks empty out.

We've already seen that the economy generally is very volatile, even more so than world food supply. A food-backed currency would not stop the volatility of the economy generally, but it would ensure no-one had to go hungry, at least.

economic mess + well-fed > economic mess + hunger

It's thus an improvement on our current system of debt-backed currency.

We are at or past peak gold and silver. South Africa, with the world's largest gold resources, peaked several years ago. Production has increased because a number of smaller reserves were brought on line.

Most of the gold ever mined still exists because it was widely used in bullion and jewelry rather than industry.

Most of the silver is gone, a lot down the drain with photography, although it is recovered from photography now. That is a shame because silver is the best electrical and heat conductor. If you want a highly efficient motor or generator you use silver windings. Same with electronics.

Platinum may prove to be the most valuable metal in terms of usefulness because it is a catalyst in many chemical reactions. When all fossil hydrocarbons are gone and things like plastics have to be produced from biomass, that process may use platinum catalysts.

Hi Paul,

re: "Barter coupons worked for a while in Argentina, but eventually they became worthless."

Do you know why?

I am not sure in any specific case, but believe that once the national currency stabilized again the local/regional currencies were dropped.

My interview with Richard Douthewaite covered some of this ground:

Mendo Credits aren't a barter slip (as opposed to say a LETS system). I don't see Mendo Credits having this problem unless the world becomes awash in food or prices deflate dramatically. This could have the effect of someone buying Mendo Credits at $10 and being able to get 11 lbs of rice, then 12 months later finding that $10 gets them 16 lbs of rice (for example). Still, not worthless since food is always worth something.

Counterfeiting. But my guess is that they did not use sophisticated banknote printing, which is costly.

The solution I offered up to the local 'lets do our own money' group was to use an RIFD chip bonded to the money (glue it). Some of the itty-bitty RFIDs are supposed to be unique from the vendor and RIFD readers should end up as common as bar code scanners.

(Note - the locals are still arguing about how many Fed Chairmen can dance on the heads of Congress so have done nothing for 6 months)

I heard a lot of talk about local currency but nothing happened until this group decided to tie it to food. It was suddenly tangible and practical.

Today we had to go back to the storehouse for more as supplies at market were gone withing 1.5 hours.

I'm seeing 'great idea - when someone does something then I'll care' and more of 'I want to be in control' combined with 'this is *MY* clubhouse - you are not allowed' in. Drama on the mailing list is 'I resign' followed by that person posting the most messages on the forum.

Not to mention the 'I want it backed by silver' 'I want it tied to FRNs' 'I want timebanking because every person's hour on earth is as valuable as the next' 'I want nothing to do with FRNs' 'I want it made from silver, on coins I mint myself - and lets get a grant from the government to do that'

In short, they typical dysfunctional behavior one finds in the 'community organizing' space.

With profound empathy that can only come from shared experience...I feel your pain.

The way things have actually worked here, for the most part, is for 1-4 people to take a lead, do it the way they want, and then let the rest catch on after wards. Ignore the naysayers who haven't given enough quality time to listen or read, but accept critical feedback from those who do.

There's plenty of farmers and good land in Mendocino County and the surrounding area, but they grow weed instead of food.

If memory serves, weed can help peoples focus on the need for local food (munchies), too.
In God, fiat currency trust.

As a land use planner in the County, Mendocino's biggest ag commodity (as in occupying agricultural land, not the backwoods or attics) are wine-grapes. The modern industrial-economic agricultural system encourages the proliferation of wine grapes in the county as we have a comparative advantage (climate) when compared to let's say North Dakota to grape production. Our governmental code (at best) accommodates this and (at worst) promotes this as it provides the best income (financial). Agricultural land use decisions aren't made based on meeting local needs; they're based on meeting financial needs. Ironically the county is beginning to recognize and encourage the growth of intensive organic agricultural products, but not for environmental or sustainability reasons. Rather these crops are seen more as money makers through export to Bay Area (and beyond) consumers in exchange for income. Land use policy discourages small scale (parcel size or even joint ownership) in favor of the large farm owner with farmworkers model.

I tried to push at this systemic arrangement with some minor code modifications but was rebuffed in 07.
Addressing land use and ownership is a HUGE stumbling block to food security. I cant stress this enough.

I admire your ability to live within the system and push for change even in the face of all the faulty assumptions you see.


It is interesting how local politicians are starting to use the rhetoric of Local and Sustainable without seeming to comprehending boo about it. When you look at their actual policies in detail it is still export driven. They turn Localization into Local Jobs and Sustainable into Organic Label for Market. This is even after huge work by community groups to educate leaders. Michael Shuman, for example, was here for a workshop. Willits has had 15-18 people attend the BALLE conferences for the past 3 years.

Something about "unlearning" is especially hard.

Addressing land use and ownership is a HUGE stumbling block to food security.

Locally their is a gent who has a McAuthour grant. Long before he got that I asked him "how can you afford the taxes on your greenhouses?" his answer - I'm a 501c3 - I don't pay taxes.

And when my Masonic Lodge went to sell the building/land - the city said 'Oh, you are trying to sell - that means you are no longer not for profit' - if that charge had stuck we'd have had to forfit the land to the city due to an inability to pay.

I cant stress this enough.
I grok in fullness, brother.

Thanks again Jason. Very sound practical advice. For more background on exchange methods in the informal, no-growth or non-economy (and whatever else you want to call it) go to:

Keep feeding us Jason!

Thanks for those links. I'd like to point out that there can be different forms of local currency at once. Mendo Credits will not serve all purposes and can't necessarily be scaled up quickly because the amount in circulation is connected to the amount of food on order or in storage.

The LETS you refer to are a good way to organize work trade when there's a shortage of national currency. Imagine two neighbors are unemployed. One is a plumber and the other is a painter. Because each has little income they don't call one another when they need work done and just do it themselves. So, the plumber does a lousy job painting his house and the painter does some bad plumbing work.

With a LETS in place they could have paid each other as professionals.

This is a great idea, which could turn from being a marginal, "complementary" currency to being the only currency in the event of continued deflation or hyperinflation. There is one important element missing from it though -- an anti-hoarding design feature called "demurrage". It is basically a negative interest rate, so that money "goes bad" just like the goods it trades for. Then, money is no longer the exception to nature's laws of cyclicity, and no longer promotes an economic system that pretends to eternal exponential growth. I explain how it works in: and
Charles Eisenstein

We have a kind of demurrage by dating the notes and not guaranteeing prices beyond a year.

It is a balance between a "store of value" system (backed by grains) and promoting exchange instead of hoarding (demurrage).

This is a nice idea, but I'm skeptical. Your "money" and your "food" both depend on a stable social system that is working properly, and where one can more-or-less "trust" that the food is there and will be there when I need to redeem one of your coupons.

But if the system has gotten so bad that food is hard to obtain, the very last thing I would do is trust anyone with my store of food. Suppose I came one day and you said, sorry, but someone hijacked the whole warehouse last night!? Well, the coupon (your money) would be worthless, I'd be hungry, and I would be angry at myself for being so stupid and at you for scamming me (you know how humans are about blaming others, eh).

No sir, if the system is so broken down, my food stays where I am. You want to exchange, fine, then bring me some food I might be willing to exchange for what you have. Do not bring me any coupon for food supposedly locked up somewhere far away and which may not be there when I go to redeem my coupon. If you were the king and had guards and all, then maybe I'd trust you with my food, but otherwise no.

First of all, do you trust Monsanto, Cargill, ADM, the USDA, and the current financial system to create a resilient food supply for you?

We would prefer that people who buy Mendo Credits take care of their own storage. You can put up the money, we will get the food to town at a lower cost than you could on your own, then you can come and get all you paid for right away.

We are also going to look into a facility on City property that will looked after by local authorities if things go bad.

Do you see the need for storage at the kind of scale required for community food security? If things get ugly will having enough food for you and yours really provide a lasting sense of peace? Would you see any value in buying more Mendo Credits than you personally need and spending them into circulation which would then have the effect of spreading around the idea and possibly the household preparedness of your neighbors?

Government is the problem, not the solution.

If your grain store house must be defended by local government, and if the effort fails, the currency fails, does that not say clearly this plan is no plan at all?

End of hope: If your grain store house must be defended by local government, and if the effort fails, the currency fails, does that not say clearly this plan is no plan at all?

The ultimate irony is that in a true disaster any significant store of food would likely be seized by the government ostensibly to protect it, but the more sensible among us know how transparent that claim would be. Lets all thank the poor people for paying in advance for our emergency food.

If there is some semblance of status quo for year-long periods then the "you assume all risks" food gift cards that expire, might have some merit - but not much.

The distribution of risk amongst stake holders is unequal (definitively). The risks appear to be mostly Jason's ego (not worth anything at all in real terms) and real USD from the people that actually buy the food gift cards. These same people are most likely the ones that can least afford additional risk in their lives.

In my opinion, it is remarkable that Jason and co. have been able to move so far in the real world with the concept - but this appears to be in the absence of qualification or prior open discussion. Whilst there may have been pre-implementation consultation with experts, the article up top does not go into much detail on this, which by implication explains some of the design criticisms manifesting themselves in this discussion. I also have no recollection of James discussing this in earlier posts, though that may have happened and I simply did not see it.

There can be no doubt that the issue of food security will soon be at the very top of the agenda - here is my only question: what does it say if the only obvious prime mover in a community attempting to address the issue is a biologist turned farmer and two women in a non-profit.

You've got a point there: trust is crucial.

If the system is that broken down, the place will be teeming with vigilantes, and ammunition will be higher on the barter list. Being a member of intentional community will increase in value, and it probably has to be very small, very local. IMO, that's a huge problem with the internet: the virtual community won't work, in general, when the value of physical items again exceeds the value of information alone.

So we use the 'net to learn how to relocalize, then gradually we'll become more globally independent and locally dependent. And then, we'll have to take turns guarding the food.

As is usual, such scenarios are hypothetical. People posting them are unable to provide historical examples.

Times of crisis are characterised by a collapse in systems of authority, but not of social systems. The government, police and military panic and turn nasty, but the common people have a moment of confusion and then just get on to sorting things out.

This is seen most commonly in natural disasters where government's first response is force, with wild claims of looting and murder and the like, but people are making strong efforts to help one another, especially helping the vulnerable (eldery, children, etc).

One problem with providing historical examples is that very broad, long term breakdowns would not leave much historical record. Since there has never before been such a large urban population with so few producing food there is no precedent for what might occur.

I do know it would not take long to eat every moose within four wheeling distance of my town if the breakdown was big and sustained. We would likely have a whole lot more oil than food in my neighborhood. But I'm with you on not wasting life fretting about what a big breakdown will bring, people do amazing things when they pull together. In the meantime investing time in community efforts like Jason does certainly seems a positive way to live.

If I can get food today and pay you [or the supplier] at the end of the month - then that is credit. The need for me to purchase your money in advance is little more than me giving you an unsecured interest free loan to get your business, sorry, I mean currency going. And the fact that the risk is all on the purchasers side, effectively makes me one of your many employers. If you want to start a business then you need to put your own capital at risk. What measures are in place that prevent you issuing an enormous amount of your own / the local currency and taking a trip to Switzerland with the US dollars, etc.

The inclusion of a best-before date on the currency introduces the issue of people saying "I don't want to carry a note that expires (or becomes unstable) in the next few months" or a rush to redeem as the date approaches. It seems capricious. The actual food passing through storage does not need a date based link to the currency.

It is laudable that you are concerned for the community at large, but I have to agree with others that I would prefer to look after my bulk food storage on my own premises. You can also guarantee that some people will start to forge the notes if they become popular.

You hit the nail on the head. Mendo Food Futures Credits are a credit scheme that greatly benefits Jason Bradford, a farmer now expanding his business into banking. The bottom sentence on the rear of the credit tells you everything you need to know about the quality of this Libertarian's promises and his genuine motive:

At this time, Mendo Food Futures is not insured against catastrophic loss of food stored, and may not be able to cover losses of grains or beans due to fire, theft, vandalism, earthquake, or flood.

Since there is no mention of blight, wind, hail, meteorite nor generally damage caused by acts of God, he is contractually libel for those. One could probably seize his farm, provided he owns it, to get repayment. Some of the services paid for using these credits may fall within the scope of a mechanics lien.

The food value of this credit slip will remain stable for a year, unlike Federal Reserve dollars.

If the credit is lost, destroyed or not redeemed within time, the issuer gets to keep the food that backs the credit and issue more credit based on it. Unlike the U.S. dollar, this credit is guaranteed to devalue for the benefit of the issuer and to the determent of the holder after one year.

This is a great scam for the issuer. He gets U.S. dollars from those who purchase the credits outright, labor performed and service provided in exchange for a weak promise to pay within a year. The issuer effectively collects interest off those whose notes are lost, destroyed or not redeemed in time. No, thank-you.

Sounds like lawyer talk. It's really no differnt from going into a store, buying a gift voucher with cash adn spending it at some point in the futre. If I choose to give the gift voucher to someone else, they can spend it at the store. Most stores will not redeem them back to cash and many will put an expiry date on them (don't know how legal this is). I don't really see much difference with Jasons scheme. Nobody is forced to buy them.

I assume that if you want rice and beans you could go down to the shops and just buy them yourself. The point is that by buying in bulk, the individual memebrs of the cooperative get rice and beans cheaper, and you can leave them in storage if you want. Community Supported Agriculture where you buy shares in the farm produce is no different.

Lots of people gave Bernie Madoff cash in exchange for nothing more than a paper reciept with made up lies on it. At least Jason has a warehouse full of rice and beans which at least have some value (and more in an emergency no doubt), but not so much that it is like he could make off with it one night and pawn it all on his way to Brazil. Anyway, how do you know that the credit wasn't provided by the farmers who supplied the stock? No doubt they would like to be paid in hard currency rather than redeemable coupons for their own produce.

I would prefer it if you'd ask clarifying questions instead of impugning motive. Your response suggests to me that you know little about the situation so I will try to address your concerns.

1. I don't own a farm and Mendo Food Futures is not my private business.

2. "Buyer assumes risk of catastrophic loss." Why isn't that enough for you? It was for our lawyer.

3. I don't get U.S. dollars out of this. Mendo Food Futures converts U.S. dollars to food and brings it to town. If you don't trust our storage facilities you can redeem all your Mendo Credits right away. In fact, we actively promote household storage.

4. If you lose the notes that is tough luck, just like dropping a $20 bill onto the sidewalk. Perhaps getting a home safe or using the safety deposit box at a bank would suffice?

5. I have spend hundreds of hours, unpaid, to help put this system in place. To suggest that I am making gobs of money from this is ridiculous.

1. Apologies, my mistake. Who issues Mendo credits (human names, corporate address)? Mendo Food Futures seems to be the company name. What is their precise link to North Coast Opportunities, Inc.? Who owns the warehouses or silos that you are currently using for storage?

2. I did not see the sentence on the front side. My mistake again. MFF's disclaimer is stronger than I thought.

3 & 5. Someone is getting the money. Do The Bank of Willits, Mendonesia Café, The Book Juggler and Leaves of Grass Bookstore get a commission or fee for selling them? When NCO sells them at the Willits Farmers’ Market, does the Mendocino County Farmers' Market Association: Willits charge an admission fee? If so, that would essentially be an additional cost of redemption. Does the farmers' market get a percentage of what is sold? Since the market is only open from May through October, how do people redeem the "Mendo Credits right away" from November through April? Are Mendo credits subject to sales tax? Some foods are taxed in California, such as takeout fast food and soda pop. Most farmers' markets require that the goods be sold by the producer or his agent and grown locally. Since MMF buys from distant farmers, are they breaking the rules by distributing the stored food at the farmers' market?

4. Losing or destroying a $20 bill does not gain asset for the issuer, the U.S. Treasury. Anything preventing a Mendo credit from being redeemed, allows the issuer to erase the debt keeping the U.S. dollars or food. Things will happen, such as house fires or natural disasters destroying the documents, that cause some fraction to never be redeemed. It is like a bank being allowed to keep the funds in the account if the original certificate of deposit is lost or destroyed. There needs to be regulation to prevent or at least minimize this, such as identification of the lender and all subsequent people who purchase the contract. The current holder should report his status to MFF, assuming they are the issuer.

Written by Jason Bradford in caption of Image 7:
Willits is geographically rather isolated, and local officials are concerned about food security with respect to transportation failures. No significant food storage exists in the area, with surveys showing less than a week of food in grocery stores. County Sheriff Tom Allman says a major earthquake could easily isolate us for a month.

In favor of Mendo credits you argue that disruptions in the transportation system and natural disasters make food storage an important necessity while the Mendo credit refuses to guarantee the warehouses and food can survive civil unrest and natural disasters. How do you think people would feel if they bought into Mendo credits thinking they had security against a natural disaster, but when an earthquake occurred, there was no food because the structurally weak warehouse collapsed and burned? Since the issuer will not guarantee their reserve against these events, you have no honest basis to use these arguments in support of Mendo credits.

Written by Jason Bradford:
Currently we buy grains and beans from farms about 150 miles away, which is as close as we can locate. These farms are organic and family owned. The point is that we can decide to support agricultural best practices....

We are selling organic grains and beans at lower prices than in stores....

The Mendo credit does not show any requirement to purchase, store and distribute organic foods. At $.91 / pound you are selling rice between the retail prices of regular and organic food. What prevents the issuer from switching to regular food?

Said by Jason Bradford:
Mendo Credits are a 100% reserve currency with each note representing some fixed quantity of food.

The Mendo credit seems more like a fractional reserve currency due to one being able to redeem it for one of four foods. I do not think a $10 Mendo credit allows the issuer to purchase and store 11 lbs. of pinto beans, 11 lbs. of brown rice, 11 lbs. of white rice and 17 lbs. of triticale. For example, if there is a run on the MFF bank with everyone wanting to simultaneously redeem their credits for pinto beans, then there would not be enough beans in storage available to meet the demand. Some people would be forced to accept one of the other foods or leave empty handed risking the expiration. Such an event may cause people to loose trust in Mendo credits and reduce their purchases preventing the issuer from raising sufficient capital to purchase more of the food that is in high demand.

Please, good members of TOD, I implore you to carefully consider how this system works before you are burned by it.

BlueTwighlight, please be constructive instead of tearing down the people who are looking for solutions. Your cynicism is not helping.

While BT's direct insults may have been uncalled for, he/she has valid points. I agree that "Mendo Credits" may not be a solution to anything at all.

See my post on plain ol' Gold & Silver down further.

This is essentially a food co-operative with the shares being tradeable. If you could organise the same thing and issue shares in the capital of a company and then used the cash raised to purchase grain, whats the difference? The Medo credit as issued is all the prospectus I would need to risk paying $10 for one. BT is reading way too much into this.

Now that I've gotten over the excitement of seeing the beginnings of a local currency, and had some time to think about the many details of your proposal, I have a few more comments to make.

My greatest concern from what you've described is that the food will get to hot for too long during summer. If exposed to temps much over 68 degrees for very long, the grains will become infested with moths and weevils, and the beans will not soften when cooked. You've looked into the price of building silos, but have you looked into how long grain and beans can be stored in a hot silo?

Grains and beans stored at ground temperature will last indefinitely. I'm hopeful that as news of Mendo Credits spreads around the area someone will come up with one or more big unused basements for community food storage.

Great idea, but basements??? This is earthquake country. Few basements.

But food storage can't be a huge problem. How do the farms and distributors do it right now?

In spite of earthquakes, there are basements, none the less. Many of the old buildings around the county had basements (the Ukiah Courthouse for example - tho I'm not suggesting it as a possible storage area). I'm no expert in how farms and distributors do it right now, but my guess is that it's a combination of the the fact that silos are filled in late summer and fall immediately following harvest (when nights are longer & hot days declining) and that whatever is left over the following summer is dependent on energy usage for cooling. Earth cooling is ancient and requires no energy. Grains and beans can be stored in big plastic or metal drums in a basement to protect them from rodents and moisture and can literally last for years. Think about it.

What has earthquake country have to do with not having basements? High water tables discourage basements, but earthquakes? I had actually excavated below my basement footing (I was lowering my basement floor and had just formed a backup footer for the original footing) when a little 7.1 hit. Nothing moved. A 7.9 centered a hundred plus miles away a few years later. The second floor shook some, but the basement did fine, and nicely anchored the two floors above it. If you are on good ground and build to the proper code (and seismic considerations are substantial in the code up here as a 9.3 struck our biggest town in 1964) basements are a good thing.

Professionally made silos can be made with insulation, with pipes that circulate air or water through them, etc. I am not familiar with particular design details, but grains and beans are commonly stored in places with far more worries than we have here--i.e., higher heat and humidity, so I don't consider this a series predicament. We are working with silo construction experts on this sort of stuff. If we don't have silos ready by summer and are still in the warehouse, we keep a low inventory for a few months then ramp up again in the fall. We may also have the option to move to a cooled facility--high energy input but high storage security.

The original Transition Town Totnes in the UK has been circulating the Totnes Pound
for some years now.
Their website is;


I do very much enjoy such stories of local initiatives and ground-up financial innovation.

Some initial thoughts:

  • Increase security measures for your currency. I cannot emphasise this enough: you simply cannot 'improve security features' of the notes once/if it starts to get popular - they'll be forged and instantly make the implementation of the idea worthless, and lose all future credability. Serial numbers don't stop anyone forging anything - the production of bank notes is a multi-step process of which serial numbers are a later stage and suited to note tracking (mainly the 'age' of a note) than anything else.
  • I am very much confused why each note has several products. I would imagine changes in technology, weather, or other factors, would change the yield of a farmer over time. Again, if these are to be instruments with a fixed redeemable value, I'd stick with one thing to be redeemable against. European currencies of recent centuries past were not redeemable against 'X gold, Y silver, Z copper and H bauxite' for good reason, well, some were and led to huge inflation and/or costly adjustments of what backed them.
  • Don't put the dollar value of food on the bills. It's confusing. As a food-backed currency stick with a food-backed promise.
  • Sold for dollars? Again, this is confusing. If the currency is credible it doesn't have to be fixed. If it is fixed make it clear the future value in terms of USD may change. While a lot of currencies in the world use 'dollar', I'm thinking another commonly used term 'pound' would be a great way to refer to the currency - whatever single you end up fixing these notes against - call them '11 pounds' for example, to refer to 11 pounds of rice. It's kinda fun, and less serious than the above suggestions.
  • Back to seriousness, what backs the currency? If the listed local produce does back the currency then back the currency with it. Don't accept dollars for the notes and stick those dollars in a bank account. Back it now, or it's a worthless promise. Especially given the last line on the back of the note a commenter above made.
  • Introducing any local currency is inflationary unless the currency can be exchanged and/or backed by something else. Neutralise the issue (by buying back/backing will dollars) or you'll see a large inflation-caused devaluation of the currency.
    • Long time Oil Drum reader, first time commenter. Feels interesting to become part of the community here.

I also enjoyed the post, and think this kind of discussion is really important.

I agree with the comment about the note being redeemable against multiple products (and dollars?). Would the bearer be able to demand payment in his choice of product, or would any of these products 'satisfy' the bearer's demand? I can imagine it'd be confusing to have to equate your money to different products, especially when there may be a glut of one, and a shortage of another.

Maybe it should be the calorie or kilojoule, as long as it is fit for human consumption!

Ha! This has become really difficult territory. For example, calorific value when consumed, or calorific value after processing for human consumption? Or other qualitative factors. Food is tough to commoditise.

Please re-read the article, I don't think you understand how it works.

The dollars we receive are used to buy food from farmers who don't live in our area, that's why we are forced to use U.S. dollars. We don't put these in a bank (at least not for long), we convert them to food. This food now backs the Mendo Credit slips.

We use a basket of food for each slip because otherwise we'd have to manage the issuing of a different currency for each product. People can chose to redeem for any of the food items on the list. Right now pintos and brown rice are selling better than the rest, so when we go to issue new currency we may not buy white rice and triticale, but instead buy brown rice, pintos and perhaps something new like wheat and lentils.

It is not a worthless promise. The sacks of food are available for people to see. People here know who we are and so public trust is high.

Currencies used to be backed by gold or silver because these are precious metals, that is they don't rust, evaporate, rot or otherwise degrade over time. They are a long term store of value. Your currency is backed by food. I wouldn't call food exactly a reliable store of value. Indeed you say so because your money expires after a year, and is not backed in case of disaster. So I would say it is a lot less stable than the FRN's since at least they are backed by the productive capacity of the American taxpayer.
Nice try but no cigar.

Hello Petroleo,

Interesting points. Consider some points that I have previously discussed in my 'Federal Reserve Banks of I-NPK' posting series:

1.Properly stored I-NPK products have an very long shelf-life, thus the rate of demurrage could be much less compared to food. The banker's fixed overhead and variable operational costs would be much less.

2. Thieves are much more likely postPeak to steal food, gasoline, guns, liquor, and drugs before they go after I-NPK or O-NPK. These guys are definitely short-term thinkers vs planting a crop, then harvesting the results much later.

Carrying a 100lb sack [or a 5 gallon bucket in each hand], while trying to out-shoot cops quickly closing the distance will be a bad bet on foot. Even if the thieves load a pickup truck full of I-NPK: it will handle very badly when they start evasive maneuvers trying to ditch the cops.

3. Insects & rodents don't eat I-NPK, so that loss is eliminated.

4. The I-NPK bags, boxes, jugs, and tanks can be randomly serialized at the point of manufacture: simple to make the serialized currency follow these numbers. A counterfeiter wouldn't know what numbers to use on the fake bills.

5. If quality & purity testing is consistently done at the factory to certify I-NPK potency: as long as the sealed container or bag is not opened, then counterfeiting or adulterating is not possible. Testing after the bag is opened can also be done.

6. Even if someone stole some I-NPK to garden: pointless to try and hide the excess theft by applying more to your soil than required, as it would burn the new plants.

This is just some of my recalled thinking on a I-NPK currency. See archives for more detail.

I want to add note #7.

A pound of typical agricultural grade fertilizer will grow 20 times or more its weight in food.

Hello Paul,

I am not a money expert, but I guess that means the I-NPK backed currency would generally be a higher $ denomination compared to food-backed currency.

The real complication of a fertilizer backed currency is that there are many forms of N P and K and they are not completely interchangeable. They have different storage cost and requirements and different freight and application costs.

One would have to make arbitrary conversions.

We don't even have the equipment and facilities (nor likely the farmers) to use this I-NPK to grow food in case it is REALLY necessary. Furthermore, it takes a long time to go from planting to harvest.

But in theory I could imagine an expanded Mendo Credits system that includes not only the food but also the inputs. This is what the UDIS does so your points are not invalid, just not the place we felt it was best to start.

Hello Jason,

Thxs for the reply, and I commend you and your helpers for your efforts --this is a difficult topic and process.

Now before you call the Treasury Department to report me, listen to my story. It may sound funny, but the reality of money is deadly serious. This is perfectly legal and I want you to play copy cat.

Wow! This may indeed be legal however I beleive it is a very serious and direct affront to the current power structure. I'd be very surprised, that if this kind of activity should become ubiquitous, that there would not be very strong resistance to it from TPTB. Then again, the Brits didn't take kindly to George Washington's ideas either :-)
Let the revolution begin, it is high time for it!

I haven't yet read this book but the discussion alone, I think is worth reading.


Cultivating Science, Harvesting Power: A story about science, industry, and agriculture with author Chris Henke

Category: Author Meets Bloggers • Industrial Agriculture • The STS Compages
Posted on: March 3, 2009 9:00 AM, by Benjamin Cohen

Though we often use phrases such as "knowledge is power," this really isn't the full story. You can have all the knowledge in the world, but if you can't use it, it won't make you powerful. What I show is that the kind of power that growers or agricultural scientists can be said to have is literally grounded in the interaction of farming places and the ways that people farm there. This not only helps to explain where power comes from, but it also helps us understand why people might want to do something in one way but not another---the ecology of power becomes a kind of structure that interested parties want to maintain and control. When something goes wrong, they want to fix it and keep it going.

Local currencies are sometimes crushed by larger interests. Since the larger interests are so busy flailing in the waters, and we are so tiny, I doubt we are currently threatening. It would be nice to be big enough to be seen as a potential threat, but I'd prefer to be seen as a good idea that needs to be seriously scaled up, even by those who screwed the pooch managing the money system.

The fact your "currency" is centralized, i.e., requires redemption from a central source, means it is easily squashed if the banksters order the US Government to "get rid" of you.

Decentralization is essential. Hence, my call for Gold & Silver coinage (irrespective of country of origin) as an alternative currency.

These notes are based on "current prices". If the dollar goes down, and or food goes up, you cannot buy as much food. No better than US $ bills.

I suggest taking the $ marks off and making it good for 10 pounds of food.

then you get into quality issues. 10 pounds of steak is worth more than 10 pounds of potatoes. But you raise a good point.

Hello Nate,

I hope TODers will think more about the possibilities of I-NPK backed currency as the potency and makeup determines its worth; example a 50 lb sack of 16-16-16 is worth more than a 50 lb sack of 10-10-10.

Also, if a farmer/gardener doesn't wish to participate: they can barter for, and/or make & use all the O-NPK they want, thus bypassing this currency scheme altogether. Since I-NPK flowrates will eventually deplete like FFs: the more people are encouraged to use O-NPK, the better for Optimal Overshoot Decline, IMO.

We are buying at current prices but honoring that price for a year. This is a kind of hedge against price volatility or especially inflation. Food could go down in price, but we are offering a lower price than people can otherwise get, so many are seeing this as a good deal and don't want to worry about what will happen to prices 6 months from now. If food prices decline it may be because people are out of work and can't afford them. In that case, if you bought Mendo Credits when you still had a job wouldn't you be better off after being laid off?

Jason-As a reserve currency, your Mendos should, as you point out, avoid loss of value except with the de minimis impact of demmurage. However, I assume that your suppliers want to be paid in U.S. currency, not Mendos. Doesn't this leave your currency exposed to all the variations in value to which U.S. currency is exposed? The price of the food you sell is a function of the farmers' input costs. This has always been the weakness of private currencies. Inputs from outside the private currency exchange area are priced in the variable value national fiat money. How can you best protect the value of the private currency against rapid fluctuations in the value of the dollar denominated inputs?

Can't perfectly do so until local sustainable farming is in place. I can only offer a hedge against volatility at this point. I make no claim that this is perfect. It is a system that we hope drives a transition towards something better.

I think it is key to think of it as a means to transition to more food safety, local food. One thing it accomplishes very well is to raise the awareness of the importance of food as central to our survival, as opposed to something we inhale on the run.

In that sense, some of the criticisms in this discussion are relevant but not exactly to the point.

The aim of gold-backed currency was to facilitate trade. Fiat currency then had a different aim. The aim of Ithaca Hours is to value individuals equally, even though "society" remunerates plastic surgeons better than family physicians. The aim of Mendo Credits is to foster a culture that will lead to local food production and storage. Thus it is narrowly designed with that in mind.

It is definitely valuable to have increasing numbers of people in a community be paid for their work with something that guarantees them access to nutritious locally grown food, and at a discount too!

You got it!

Each money system comes with trade offs and has different purposes and effects. I have been somewhat frustrated by a few of the comments because they don't seem to appreciate that. One kind of money is not necessarily better than another. The question is: "What do you want the money to do?" Then design with that purpose in mind.

Currencies were backed by gold because you can have an ounce of gold today, store it in a safe or bury it in the ground for 500 years, and after that you still have the same ounce of gold. It won't degrade. It is a store of value. Trade refers to the medium of exchange use of money. That can be done without gold, as long as everybody agrees on what the medium must be. Fiat is only a medium of exchange, without any intrinsic value whatsoever, and it works for trade, but no so for store of value (inflation). So for trade you could use the mendos, but as a store of value, that's a risky proposition.

Store of value is a relative thing. Gold doesn't degrade, fine, use it for a store of value. But that system already exists and hasn't done squat to improve local food security.

Now if I take a grain of triticale and put it in the ground in October I can get 30 grains back in July. Nice rate of return! Not only did it not rot when buried it multiplied and I can make bread with it.

I guess you're right when you state it that way. The objective of the gold system and the fiat system is not securing food supply, but securing acquired value and facilitating trade respectively. The mendo system has a different objective. I doubt however whether that can be called money in the usual sense, but OK, I see where you're getting at.

I guess the biggest issue I have with this is that it expires and it isn't guaranteed. At least the FRN's and Euros don't have an expiration date, although admittedly each year you can buy a little less with them. But with the expiration date, it becomes like a gift card or a hedge against price increases. Suppose I wanted to convert my dollars to mendos in order to be able to have access to food when disaster strikes, and then the disaster is a failed crop or a fire in the silo's, then my mendos would be worthless. Of course with FRN's I would also not to be able buy food in these cases, or only against very high prices, but FRN's don't pretend that you can. How are people going to react when they can't redeem their mendos when they most need it? In other words, how are you going to deal with the equivalent of a bank run?

The supply of Mendo Credits never gets larger than the food they represent. A bank run would simply deplete our stores, and we'd scramble to issue more currency and order more food.

If people are super worried about a disaster that destroys our food stores, they would probably be the sort of people who would store it all themselves. We can't say "there will never be a disaster" of course. We try to keep a cash reserve that could be used to rebuild stocks quickly, and I suspect if something bad happened we would do our best to split the losses as best we could.

But nothing is really "guaranteed" of course. The whole edifice we created with spreading risk, buying insurance, etc. is now obviously a house of cards. Perhaps it is time for people to wake up to the fact that "life" is risky and all you can do is weigh risk/reward, sort out how much risk you can take on, etc.

Yes I guess that's about the best one can reasonably expect. And of course the value of fiat is only guaranteed in so far the central bankers control their urge to start the printing press. So if you can control yourself and not print more credits than you have food, this might indeed stimulate local food supply. Good luck.

For what it's worth I suspect that where I live (Ontario Canada) this system, as described, would be illegal. I say this because it seems to me that a contract like the "Mendo Credit" could be deemed to be a "Gift Card" and the "Consumer Protection Act 2002" prohibits Gift Cards from having an expiry date, and from charging unspecified "roll over" fees.

Not correct. The Mendo Credits plan is not illegal per se. They are theoretically redeemable indefinitely, just not at the prices stated at receipt of credit note. Insolvency of the MC central redemption is a far bigger threat. Change of value of the "units" in the "gift card" / phone card is typical nowadays.

This doesn't qualify as commodity-backed money, because after a year it changes so that you can only get as much of the commodity as $10 US fiat dollars would get you. It's cute, and I hate to be negative about something so obviously well-intentioned, but these really are more like $10 food gift cards than like commodity currency.
Obviously, the reason you can't function as an *actual* issuer of this type of currency is that you aren't a primary producer of white rice, pinto beans and triticale, etc. Thus you can't afford to make a long-term guarantee against possible large (dollar) price moves in these items.
The only benefit to someone in getting one of these is as a hedge against short-term price moves. So it does combine a small commodity call option with the gift card component. But because it isn't a long-term store of value (it turns into a $10 bill when the option expires, only less valuable because of counterparty risk, i.e. the chance of your outfit disappearing), it isn't really an independent currency.

There is no such thing as an independent currency. An issuer of a currency doesn't HAVE to produce what is being sold.

But many of your points are well understood. Ideally, we are the producers of the products instead of a storage and distribution agent. The question was "How to get there from here?" If we are successful then it can evolve into something like the UDIS or the more ancient commodity backed currencies and mentioned above in Egypt and Japan.

Actually, this is somewhat similar to a commodity-backed currency tried at one point in the U.S. that Richard Douthewaite discusses (see references) only THAT one never actually took hold of any product, simply tied the currency to a basket of commodities in the Chicago exchange. So I guess definitions of what a "commodity backed" money is differ.

Let's imagine the local grocery store issued gift cards at $10 face value that are valid for a year (which is the U.S. legal standard for currency). Could this be used as a medium of exchange, act as a store of value, and thereby qualify as money? Isn't this essentially what merchants who issued local scripts have done before?

Jason, please be aware of Gresham's Law: "Bad money drives out good".

Whenever bi-metalic (gold + silver) money systems have been tried, the relative values of the two commodities get out of whack, and then there is a rush to use the lower value money to buy up and take out of circulation the higher value money. This results in considerable instability and disruption.

Be aware that any money system based upon multiple commodities of any type is vulnerable to Gresham's Law. The only way to avoid it is to settle on only ONE commodity as the monetary standard.

Gold has many inherent qualities to commend itself, which is why it features so prominently in monetary history. Silver is an important runner up. Many other commodities have been experimented with (including my favorite, the massive round stones of Yap Island); your's is just the latest in a long line which will undoubtedly continue indefinitely. I don't know if anyone will ever come up with something that is truly "better" than gold - time will tell.

Perhaps the difference here is that only paper is being printed, not precious metal coinage. So, if we buy a basket of products and some are used more quickly than others we can adjust our future purchases accordingly and smooth out differences in perceived value.

The more products we have the less any one of them will dominate. People have different tastes and predilections for food. Wheat is popular with bread makers, but then there are those with wheat allergies. I think of it like an index fund in which volatility is masked by diversifying. This is how the commodity-backed (not gold or silver) currency done previously in the U.S. worked, and it worked just fine.

Isn't the trick on any currency having a government (ruling authority, call it what you will) that guarantees the currency's value. What good is gold if no one will take if for food? I've never looked into this at all and that is the first question that popped into my mind.

The Mendo system (in its current configuration) is kind of like collecting money from a bunch of people and sending someone out shopping with it then dividing up what was bought fairly with those who pitched in for the shopping trip. I don't see how substituting any type of precious metal for the paper script would change the value, which is basically the percentage (in food) of the total bought on the shopping trip the script holder paid for initially.

I realize the system is more involved with carry overs from multiple trips and notes not being redeemed on an specific trip but that doesn't affect its essence. When local producers start bringing their product to the storage facility in exchange for script the system will begin evolving but it will still be food backed. Precious metal would bring nothing to the system as far as I can see.

If one gets paid in Mendo credits, does this get included in gross income when one files one's taxes?

Any transaction that would be taxable in U.S. dollars is also taxable in an alternative currency.

Because we are doing food transactions, Mendo Food Futures doesn't have to deal with this ourselves.

We also accept food stamps for Mendo Credits.

Yes, theoretically. If "Mendo Credits" were to include 1/100th of a cent face value on their notes, you could really stick it to the IRS, like the guy in Vegas paying his employees in Gold American Eagles, at face value. :-)

The guy in Vegas paying with American gold Eagles had to pay taxes on the value of wages paid equal to the actual gold value, but avoided any criminal penalties.

I thought he won all the 'way round. Got a link backing up your version?

The first meaningful match I encountered using Google supports you and not Paul.

From: Dated June 2008.
A business owner in Las Vegas, Robert Kahre, paid his workers in gold and silver coins. They had filed income tax returns based on the face value of the coins instead of the much-higher market value. The IRS brought 161 charges against nine people, including Kahre, and failed to get a single conviction.

From the Las Vegas Review-Journal:

. . . the trial lasted four months. It relied heavily on evidence gathered in a controversial armed raid in May 2003 on several of Kahre's local business places. The raid entailed keeping more than 20 workers handcuffed, at gunpoint, in 106-degree heat without shade or water while agents collected records and equipment.

Kahre is pursuing civil actions against several parties, including the head prosecutor J. Gregory Damm and the IRS "agents."

A half million dollars would build the silos, fill them with food, and give us the peace of mind of a one month supply of food for the community, and potentially spawn a revitalization of the local food system, including jobs in farming, food processing, waste recapture, and transportation.

And with 14,000 people, that's $35 each, or about the cost of a family night out at the movies; well worth the peace of mind alone.

Just out of curiosity, if a harvest one year didn't live up to projections, what would happen to those with credits when the produce ran out? Kept for next year, and figured into the projection?

Who issues the notes? What are the farmers paid with?

We are buying from farmers who have food in storage at their farms. If they have a bad harvest either the price would go up or we'd have to buy from someone else.

The credits are backed by food we have on hand, not what we expect any particular farmer to produce. However, if we expand this system it could entail working with individual, local farmers.

The notes are issued by the non-profit Mendo Food Futures. The farmers at this time are paid with U.S. dollars, but it could transform into more of the UDIS system where farmers can get paid in the local currency, but they'd have to be local farmers to want to do this.

I agree, a real bargain of a project. The job now is getting enough people to see how valuable it is so that community inward investment allows us to scale this up. Either that or a granting agency likes it enough to help develop the model further.

I've been telling people to get their money out of stocks and into community investment with little success thus far. But what options did they have? This concrete business model may finally attract folks. I worry it is too late for many.

"We are buying from farmers who have food in storage at their farms."

What food is in storage in Mendocino county ? What food is grown in Mendocino county that is in storage ?

Almost none is currently in storage here. Almost none is currently grown here. The food is grown 150 miles away. We ship it here. It then gets stored here. As a result, we build local storage. Can we then have local production?

In the future , grains/staples may need to be shipped by a more simplified rail system.

So for 150 miles maybe a steam or bio-diesel/electric hybrid could be developed to fit on standard/existing tracks to get the food delivered ...

similar to this ??

Indeed. Hence that last image of City property along railroad tracks.

Food storage in Mendocino County involves practically every Mormon family as well as a significant portion of hearty folk of other faiths who realize "the System" can't be trusted farther than it can be thrown.

The only commercial food storage inside the county would be, perhaps, Alex Thomas and affiliates, storing fruit. The 72 hour (or less) supply in the grocery stores doesn't count.

Moving food in the future ....

The Uniflow Piston Engine in Future Steam Railway Locomotives

Hi Jason, Great post

This is something I have been thinking about since becoming aware of "Peak Oil" - thanks TOD. I have a shallow oilfield located in a fertile region of Texas and have been scratching my head over how to set up a small refinery. My oil is light and sweet - hence my handle - and I think I could refine abuot 200 gallons of gas and diesel each on a per day average. This would not keep a "Big Ag" operation going but it would work for farmers. I was then thinking of using some sort of coupon, which, say would be good for 5 gals. to exchange for an equivalent value of food and or services and sort of get the ball rolling in my area.

Thinking back about helping my father turn under our family garden with a shovel, and then seeing how well a walk behind tiller can do the same job, I have really come to appreciate how much work is stored in a gallon of gas. I know there are still many old Ford 8N tractors out there and they would be a big help to the productivity of a "Small Ag" operation.

I have not worked out the refining aspects, but I will, and I think using a localized resource like this could work here and in many other places - shallow oilfields are many and widespread and ignored for the most part.

I would appreciate yours and others thought on how this might could work.

Keep Up The Good Work.


Note the multi-color tops of the 5 gal pails?

A link to the maker of 'em.

Thanks. These are pricey but extremely nice. You really have to wack them forcefully to get the rims on, so use a rubber mallet.

Personally, I store a bunch of stuff in vacuum sealed pails in mylar bags that I don't touch unless I really have to, and the rest in easy to access pails.

Pricey is relative. What price bug infestation? Or mold?

Hints on pails:
1) use a tin snips to cut the lids off.
2) don't place outside to process - you get accused by State actors (cops) of running a meth lab

Not only do I use the pail lids for preservation, glass canning jars work well. No mylar bags at this time.

Don't forget:

And the software I'm using for the county wide timebank (trying to dredge up a board and find excitement/people who will work within the 4000 man social fraternity I'm a member of - Sat is a local meeting, and towards the end of the month is another meeting. If all goes well, by the summer we'll be operational. If it goes REALLY well, by next year - every county in the state will have one)

That's great! I think labor exchange systems would be complementary to a Mendo Credit sort of system. Mendo Credits are limited by food supply, whereas these are only limited by willingness to participate. Each has their own set of social challenges of course.

I used to think that storing food was unnecessary and extreme. Perhaps that's because I remember the period from the 1960's to the 1980's when there were huge food surpluses in the US and Europe and farmers were paid not to plant.

Since that time the world population has doubled and the surpluses are gone.

A few years ago I read a book titled "The Lost German Slave Girl", a fascinating true historical case involving woman supposedly from Germany who ended up being a slave in New Orleans before the Civil War. The Germans came to the US to escape the terrible famine of 1816, the Year Without a Summer. The court records tell a Malthusian nightmare story of the conditions in Europe, the starving refugees selling themselves into slavery for passage to the US, and the death of half a shipload of refugees from lack of food and water. (The book is an excellent history less of the period, especially for someone interested in the legal aspects of slavery at that time.)

History is full of famines, from the Seven Bad Years of the Pharaohs to the Irish Potato Famine of the late 1840’s to world wars of the 20th Century. Practically every decade has one; however, we always think it’s just a third world thing. Maybe we have we just been lucky.

The current world food situation continues to worsen as population outstrips farmland and harvests. Any series of widespread crop failures or major outbreak of war will be a disaster of biblical proportions.

I believe everyone should keep a reasonable stockpile of long shelf life food, and systematically manage it by the best before use date. Also, everyone who has some suitable space should have a small garden, a good shovel, some fertilizer and seed.


Can you say what the 'cereal' is in the energy bar recipe, please? I guess that it refers to something specific in the US, but in the UK it would probably mean something like any of the many varieties of breakfast cereal, which you probably don't mean.



Cereal is simply cracked or rolled grains in this case. Think oatmeal or muesli. You can take whole grains and run them through a mill on a grinder setting that doesn't create a powder, but grit. Grits! That's another cereal made from course corn.



I saw this story linked from Gold is Money (

What I don't understand is this:

Gold & Silver have been money for thousands of years.

It's available to anyone.

It doesn't change value (people wrongly perceive it does - actually, paper "money" changes value in relation to the metals).

It requires no central control to use/exchange.

Simple coinage is nearly impossible to effectively counterfeit.

SO...why not just use it instead of another paper "currency"?

In order to set up a quick, simple, yet effective system for Gold & Silver exchange, a list of accepted coinage would be drawn up (i.e., coins/rounds requiring no assay, like Gold or Silver American Eagles), and people would be asked to come aboard to circulate them (i.e., use them to pay for, and ACCEPT them for, goods/services).

With all due respect to the probably good-willed folks planning this, the involvement of NCO, a huge insurance company foundation (the CE is a product of Blue Cross), and an FDIC-member bank are huge Red Flags for me.

You pretty much answered your own question, except I disagree with one point - "Simple coinage is nearly impossible to effectively counterfeit":

Paper notes are designed to be increasingly difficult to counterfeit with each passing design update - they are effectively a complex moving target for the counterfeiter. Each note is unique. In the general population of notes they wear out pretty quickly facilitating easy and frequent replacement. Other than having high face value, the cost benefit / risk analysis is not good for the counterfeiter - if it were, then we would all be buying the paper, inks, printer, etc.

Coins as you rightly point out are much simpler, much longer lived and are all identical. I would guess that counterfeits would appear very quickly - these counterfeits would actually be equal to and indistinguishable from the real thing. Is it the source of the coin or its quality that determines if it is a counterfeit?

Money launderers, would have a clear, long lived and obvious path to legitimize their ill gotten gains - mint new coins, incredible face value, never wear out, etc. Once they have the process refined it would likely never change. This would represent massive loss of sovereign control of the currency - any country and any one (with the resources) could mint their own coins.

Also, coins would be ideal for hoarding outside the banking system and in a cash society would be the best possible way to mitigate tax risks. Surely you can see why the powers that be would be completely against precious metal based coins in general circulation, hence it is never mentioned or taken seriously.

Precious metal based coin would spell the end of 'easy' taxation and big government.

Coins are relatively easy to identify. Silver is 20% denser than lead and gold and platinum are twice as dense as silver.
Also, silver and gold are among the most malleable metals and when "struck" into coinage, easily form sharp details.

Silver coins have a distinctive ring when dropped on a hard surface. There are probably inexpensive instruments to detect things like sound transmittance, heat and electrical conductivity.

Make no mistake, all paper currencies are in extreme danger. They will all depreciate due to the massive amount of money printing required to bail out the insolvencies and pay for stimulus plans. Add in social security, medicare and retiring boomers and you have government insolvency.

Oil and other resource depletion is part of the problem. The oil importers cannot possibly afford prices of last year and in coming years. Money will have to be printed, and this will only work for a short time. That is exactly what happened in the 1970's and it lead to high inflation. This time it will be much worse.

It is not 100% clear, but you may have missed my intent. When I said "equal to and indistinguishable from the real thing", this means that the counterfeit is actually made of precious metals. Ordinarily a counterfeit (or knock off) is an inferior product compared to the real thing. The context I was using, is not that of a 'traditional' currency counterfeiter, but that created my money launderers or any other party with access to the metal and an ability to mint coin.

It is rare that counterfeiters use real precious metals. This happens with collectible coins. Popular ancient Greek and Roman coins have been counterfeited. Also, I've seen US silver Trade Dollars on Ebay that I'm sure were fake. I've bought Roman coins on Ebay that I'm sure are fake.

Collectible coins is a field for experts. Dealers and collectors have a database and network and alert each other.

Common coins are much less likely to be counterfeit. In all the years the US was on silver coinage, I do not remember hearing of counterfeit coins.

In all the years the US was on silver coinage, I do not remember hearing of counterfeit coins.

Possibly because during that period money laundering was straight forward and the authorities had yet to introduce anti-money laundering regulations - organized crime had yet to evolve into sophisticated 'professional' endeavors.

If you restrict the perception of the counterfeiting to be strictly the act of making its own profit, then yes it would be extremely unlikely that the counterfeit coin would be equal to the real thing. On the other hand, if the purpose of the counterfeiting is not to 'make' a profit, but to convert one, then that is my perspective.

You raised a point that I did not consider, namely, that there are generic coins that collectors and dealers call rounds. They sell at or below spot bullion prices. A lot of these things were made by for profit mints selling so called limited additions. Mining companies like Stillwater and several of the silver miners had these made, as did the Chinese in recent times.

But to launder money you have to buy the metal and I'm sure anyone taking delivery on large amounts of metal would be suspect, especially because they would be paying cash.

But to launder money you have to buy the metal and I'm sure anyone taking delivery on large amounts of metal would be suspect, especially because they would be paying cash.

Depends how drug users fund their habit. If it is through burglary then they may find paying for drugs with stolen jewelery gets a better deal. Obviating the need to fence the usual stolen electronic items.

I suggested this for our tribe about a year & 1/2 ago. Absolutely no response. If the economy continues as it is, tribes (being cohesive communities) will start taking this chance. And it will work.

One thing you might want to consider doing is using small silver coins rather than printed paper. Coins are almost impossible to counterfeit. You could use a half ounce or quarter once of silver instead of your $10 bills. This would also have the added benefit of giving the money intrinsic value beyond just being able to exchange it for grains at your shop. This would encourage other merchants to accept it and customers to buy it.

There are quite a few mints around the country that could probably arrange to mint coins for you even with your own design. Half ounce coins might cost you $7-$9 to mint.

I don't think paper should be trusted. There is just too much potential for fraud and failure. When the currency itself is made of something which is valuable in and of itself the users of that kind of currency are much better off.

The premium on the coins was less than 6 dollars.

You may make your Currency available at whatever price structure you desire, but to remain competitive with other currencies we recommend spot + 4.25. Eventually, CO's will order volumes of your Currency and simply pay a $1 license fee for each coin produced to You!

About $2500-$3000 for a die set is what my memory says. 1/2 oz is "easy" to mint vs 1/4 oz.

That project sounds really inspiring!

Would rapeseed oil made from canola be a alternative to Diesel or gas?
I'm living here in northeastern Germany at about 53,5 northern latitude. Farmers get about 4 tons of rapeseed per hectare. In a press it is possible to get about 33% of the mass as oil. So you get 1300 Liter of pure rapeseed oil (freezing at -15°C) per hectare. Even some modern motors can use this oil with little modifications: Usually you just have to change the nozzles, install a little heat exchanger before the pump and change the tubes (bigger ones) from the tank to the heat exchanger.
In Winter (< 0°C) you should add perhaps 10% (per each 10°C of cold, just a guess) of Diesel or Biodiesel.

Since about 40 years there is the knowledge of diazotrophic bacteria which can transform usual plants (rice, wheat, maize, canola) into legumes (delivering nitrogen to the plant in exchange of sugar or other carbohydrates). Main work has done a brazilian scientist (Johanna Döbereiner), especially for sugar cane and soja.

The bacteria for canola is called Azorhizobium caulinodans:

"Effects of Glucosinolates and Flavonoids on Colonization of the Roots of Brassica napus by Azorhizobium caulinodans ORS571"

This bacteria is perhaps available at special sites of agricultural science.
Last year there was the product "Twinn" introduced in Europe (from Australia), but this is only useful for grain i think.

One example from ancient egypt ( ;-) ):
"For over 7 centuries rice rotation with clover has significantly benefited rice production in Egypt. Clover is normally associated with Rhizobium leguminosarum bv. trifolii that forms N2-fixing nodules in the root of this plant. Surprisingly,strains of this bacterium also were encountered inside the rice plant with around 104-106 rhizobia per gram of fresh weight of root. "

From "Natural endophytic association between Rhizobium leguminosarum bv. Trifolii and rice roots and assessment of its potential to promote rice growth" :

I have forgotten an important information in relation to these diazotrophic bacteria:
There are existing already some patent methods on this special bacteria. And the owner of this patents are well known:
Esso (CHEMICAL CANADA, CA)and Agrium (INC, CA; formerly called Cominco fertilizers).

I know this because of the patent documents of the german patent authority:

Dokument (Document) DE000003752041T2 (Seiten (pages): 41)

Titel TI [DE] Nützliche, direkt wirkende Bodenbakterien
Anmelder (Owner) PA AGRIUM INC, CA
Anmeldedatum (date of application? means when the document reached the patent authority first time) AD 15.12.1987

Here's the corresponding document in English:

Dokument (Document DE000003788689T2 (Seiten pages): 34)
Titel TI [DE] Pflanzenwachstumsteigernde Rhizobakterien für landwirtschaftliche Nichtwurzelgetreide.
( Plant growth-promoting rhizobacteria for agronomic, nonroot crops)
Anmeldedatum (date of application?) AD 19.08.1987

Document in English:
"Plant growth-promoting rhizobacteria for agronomic, nonroot crops ..."

So it seems to me that BIG OIL at least 20 years ago knew what will be important in the next decades. From every portion of diazotrophic bacteria used there will go a little fee to this big firms.
But: Bacteria once established in the soil, they will never vanish when soil is treated only with organic matters.
Only if chemicals or pesticides are applied then they will die and one has to buy another bottle.

Hope this helps!

Jason, as always your stuff is well thought-out and interesting.

Your thoughts seem to echo a lot the thoughts of Bernard Lietaer.

If you haven't already looked at it, I'd recommend the recent article:

"All the Options for Managing a Systemic Bank Crisis"

Some tasters from the article:

I find many resiliency related benefits with local commodity backed currencies. Then again, many monetary economists might not agree with that :)