About Mendo Moola
Announcement – Mendo Moola Coming To Ukiah This Fall 2009→
Local Trade Money
Merchant-Backed
Certified Sustainable
We all think about money in very narrow terms. We believe that money is something our national government controls, and determines what we can use as money.
But the truth is that money is anything that people agree to use as a means of exchange, like the local money shown on this page that is produced and circulated by other communities like Salt Spring Island. If we choose to accept Mendocino Neighborly Notes (Mendo Moola) in face-to-face, hand-to-hand payments, we will make it become real money in our community as they have done. Mendo Moola is not intended to replace our national currency, Federal Reserve Notes, and is not alternative money, but is rather complementary money that stays in our community rather than leaving it, thus facilitating additional exchanges in the local economy and making it possible to match unmet needs with unused resources. The more often it circulates (changes hands) in our community, the more prosperous local farms and businesses become through The Local Multiplier Effect.
A shortage of the national currency (credit crunch), which is based on debt and endless growth, may occur — which many say caused the 1930s depression — or its mismanagement may inflate it to worthlessness. (Shortages are also caused by ‘leakage’ of our money when, every night, money spent that day in chain stores is sucked out of our community electronically to their headquarters elsewhere.) But as long as there are real needs to fill, food to grow and buy, work to do, stuff to make, and things to trade, there never needs to be a shortage or inflation of local money circulating in our community. Whether inflation (net increase in money supply and credit) or deflation (net decrease in money supply and credit), if pegging its value to the national currency becomes problematic, the backing of a local currency can be additionally strengthened. The more Mendo Moola gains in circulation as a percentage of currency used in the community, a multiplier effect kicks in that creates more wealth in the community. Following some of the links provided, you will read stories of how communities in bad financial times, when access to the national currency dried up, were able to recover and prosper with complementary currency while nearby communities floundered.
The purpose of community currency is to function on a local scale the same way national currencies have functioned on a national scale — building the local economy by maximizing circulation of trade within a defined region. Widely used in the early 1900s and again in the 1930s, local currencies are once again being recognized as a tool for sustainable economic development, and is in use by various communities all over the world. Local currency distinguishes the local farms and businesses that accept the currency, building stronger community relationships and a greater affinity between the farm and business communities, and the citizens of a particular place.
We, the people who choose to use our own community currency, make a conscious commitment to buy from locally-owned and regional farms and businesses first. We are taking personal responsibility for the health and well-being of our own community by laying the foundation for a truly vibrant, thriving local economy. Our use of Mendo Moola will help strengthen the regional economy as it has elsewhere, favoring local family farms, locally-owned enterprises, local manufacturing, and local jobs, by reducing the region’s dependence on an unpredictable global economy.
This is an invitation to create a community currency. Local money will only have value if the communities in Mendocino County decide to use it. We invite all of you, our neighbors, to join this new game creating our own local money, making a difference, and having fun doing it.
Triple Our Money Mendo Moola will be an initiative of Mendocino County localization groups, business enterprises, and financial institutions working together. Economic localization and community currency systems provide the opportunity to strengthen the local economy by promoting locally-owned farms and businesses, while preventing our money from leaking out of our community to parts unknown. Studies over the past ten years show that one hundred dollars spent at a chain store leads to only thirteen dollars staying in the local economy, while one hundred dollars spent in a locally-owned store leads to forty-five dollars circulating locally. Spending locally results in three times the income effects, three times the wealth effects, three times the jobs, and three times the tax income, before it leaves the community. And what if that money never left the community and kept circulating indefinitely, one hundred times, five hundred times, and more?
A local complementary currency encourages and rewards local spending, by local people and visitors, in local businesses. The anticipated benefits of Mendo Moola are:
- To build resilience and safety in the local economy by keeping money circulating in the region and building new relationships, creating more sustainable, independent communities.
- To promote our own locally-owned farms and businesses.
- To provide more local work.
- To get people thinking and talking about how we spend our money, and who we spend it with.
- To encourage more local trade and thus reduce food and trade miles.
- To encourage tourists to use local businesses.
- To support local food banks and homeless garden projects.
How it works You can receive Mendo Moola ($MM) in exchange for Federal Reserve Notes ($US), then go out and use it just like national money.
- Mendo Moola will be issued to the public by the Mendocino Neighborly Trust (MNT), a local volunteer, non-profit cooperative, in exchange for Federal Reserve Notes that are deposited in a federally-insured, interest-bearing account.
- It can be exchanged for goods and services at participating farms, shops and businesses… and between neighbors. Users agree to treat it as an equivalent: $MM = $US.
- It is up to each business to decide how much $MM to accept in any given transaction.
- Businesses are encouraged to exchange and spend $MM into the local economy and issue it as change. $MM can always be exchanged for $US at the MNT office and the following Banks and Credit Unions: TBA.
- The MNT website will keep, and make available on-line a running, up-to-date account of the outstanding $MM issued and the corresponding $US that backs it.
- As a surplus accumulates in the deposit account, it will be transitioned into low-interest micro-loans for local, family farm, small business, and cooperative start-ups, encouraging their vitality through Direct Public Offerings (DPO) to our community.
- A percentage will always be devoted to local food banks and homeless garden projects.
As the $US sits in a local bank account backing the $MM while accumulating interest (in actuality, also being invested by the bank in the community), and funding new businesses, the $MM is out in the community facilitating exchanges of goods and services. As it picks up velocity it is making the economy of the community energetic and abundant in exchanges. A $MM5 dollar bill that changes hands 50 times in a month is responsible for generating $MM250 ($MM5 X 50) worth of trades. (also see The Velocity of Money.)
What about taxes?
Say I’m a plumber. I come to your house and fix the plumbing. And you give me a nice cake in payment. I’m supposed to declare the value of that cake and pay taxes on it, because I’m in the plumbing business. Now say I am a professor at a university. I come to your house. I fix your faucet. You give me a $100 bill. I’m not obliged to declare it because I’m not in the plumbing business. As I said: it is not the currency used that determines whether a transaction is taxable or not, but the nature of that transaction. Interestingly, there is one complementary currency, the time-doller system… that is officially tax-free in the United States. It’s used to resolve social problems, and the IRS has ruled that time-dollar systems are tax-free. ~~Bernard Lietaer
Like U.S. dollars, local currencies are a legal form of taxable income. The Federal Reserve and the Internal Revenue Service have no prohibitions on local currencies, as long as their value is fixed to the U.S. dollar, the minimum denomination is worth at least $1, and the bills do not look like federal money. A well-developed, sustainable, regional economy which produces more for its own needs first is possible only when control of its resources and finances lies within the region itself. By accepting Mendo Moola, merchants are helping to establish markets for locally grown and made products, providing an incentive for the growth of small farms and locally-owned industries, while creating opportunities for those underemployed and unemployed to turn latent skills into local business ventures. A local currency that undergirds and builds the local community is only successful when it is consistently circulated, traded and valued locally. Whether times are dire, or times are good, a local, Ukiah Valley (Hopland, Ukiah, Redwood Valley, Willits) currency is an idea who’s time has come. What goes around, comes around.
Dave Smith – Mulligan Books, UkiahBlog.org
“Show me the moola!”
