Monday, February 27, 2012

Leeds gets its very own banknotes

The Guardian
Monday 27 February 2012 11.20 EST

Leeds gets its very own banknotes as alternative money summit meets.
Conference issues five and three Ludo notes, printed with pictures of local notables and monuments.

Valid for food and drink - and plump-cheeked Matthew Murray looks as though he's had his share of both. Design: Tom Morgan

Here's joyful news for all children of Leeds: we are about to get our very own banknotes.

Not for long admittedly, but on Wednesday at the city's noble Corn Exchange you will be able to use the pink 3 Ludo and blue 5 Ludo notes within a closed economy at a conference on the future of money.

Tired of the long-standing pound versus euro debate, the organisers of TEDxLeeds, a homely Leodiensian version of global blue-sky thinking conferences in California on 'Ideas worth spreading', have printed a stack of Ludos. The work of local freelance web designer Tom Morgan, they were named by Emma Bearman of the city's excellent CultureVulture blog.

She explains:

The name was chosen to imply both playfulness and the city's ancient name of Leodis.

While Morgan says:

The designs both celebrate Leeds' past and hint at its imagined future

The big pink man on the 3 Ludo is Matthew Murray, an engineer on a level with James Watt who was commercially out-manoeuvred by the latter. One of the great mysteries of my life is why my great-grandfather Richard, an exuberant entrepreneur who claimed to have invented a smokeless chimney, commissioned the statue of Watt which stands in City Square.

I am saving up to get one of Murray, just a tad bigger, to overshadow the Scot. But meanwhile, who's the big blue baby on the 5 Ludo? He or she represents the future of Leeds.

You will be able to use the dosh to buy food and drink at the TEDx do, provided, it has to be added, that you pay the £15 conference fee. But there may genuinely be a wider future for the currency, which has many historical predecessors (and why they were abandoned may be a good question to ask at the conference); and some modern ones, including the Lewes and Brixton Pounds.

Here's the 5 Ludo, with its slightly alarming babe. Design: Tom Morgan

Like these, and the Local Excchange Trading Systems network, or Denis MacShane's famous Euro Day in Rotherham, the Ludo-ites are working on various outlets and institutions in Leeds to agree to take the money longer term.

Imran Ali, one of the evening's hosts and founder of TEDx's LSx offshoot says:

This is a really exciting opportunity to give the people of Leeds - and especially those working in the financial sector - a chance to hear from some of the leading thinkers and innovators on the subject of money.

Leeds has 30 national and international banks; 150 accountancy firms including nine of the top ten largest UK practices; ten stockbroking firms; three of the UK's eight largest building societies; and is home to Britain's first telephone banking operation and the only Bank of England note issuing centre outside London.

Monday, February 6, 2012

Can Bristol's Banknotes Match the World's Most Beautiful Currencies?

February 6, 2012

Bristol is the latest area to plan its own currency, with citizens being encouraged to design a new bank note. The city's budding designers can take inspiration from our collection of beautiful banknotes from around the world.

A Short History of American Money, From Fur to Fiat

The Atlantic
Feb 6 2012, 10:33 AM ET

From The End of Money: Counterfeiters, Preachers, Techies, Dreamers--and the Coming Cashless Society by David Wolman. Reprinted courtesy of Da Capo Press.

Before independence, America's disparate colonial economies struggled with a very material financial hang-up: there just wasn't enough money to go around. Colonial governments attempted to solve this problem by using tobacco, nails, and animal pelts for currency, assigning them a set amount of shillings or pennies so that they could intermix with the existing system.

The most successful ad hoc currency was wampum, a particular kind of bead made from the shells of ocean critters. But eventually the value of this currency, like that of other alternative currencies of the day, was undermined by oversupply and counterfeiting. (That's right: counterfeit wampum. They were produced by dyeing like-shaped shells with berry juice, mimicking the purple color of the real thing.)

It was a crew of Puritans from Boston who first put their faith in paper. Initially, the Massachusetts Bay Colony tried to issue colonial coinage. The pieces themselves, struck in 1652, were made from a mash-up of poor-quality silver and were soon outlawed by the Brits. Less than a decade later the colonists tried again. They were forced to, really, because they owed money to the crown to help fund Britain's war against France, yet lacked any currency with which to pay up. They called the paper "bills of credit." The local government essentially said to the people: Here, just use this. It's real money. We'll sort out redeemability later.

There were endless debates, from prairie farmlands to the floor of Congress, about whether this paper was real money or just a smoke-and-mirrors scheme destined to end badly. In the United States that dispute, between the fear of paper and the advantages of national currency, would rage for more than a century, and it is even front and center in the Constitution.

During the Continental Congress, the founding fathers deliberately forbid the nascent federal government from issuing "bills of credit." Paper money, one delegate noted, was "as alarming as the Mark of the Beast." The federal government was, however, granted authority "to coin money, regulate the value thereof ... and fit the standard of weights and measure."


But paper issued by the federal government would get its chance, thanks to the Civil War and its economic fallout. To foot the bill of the Union Army's campaign, the government had to issue $450 million in greenbacks (about $8.1 billion in 2011 dollars). They may have been un-constitutional, but they worked, making it possible to buy equipment and pay soldiers. War has a habit of quieting concerns about currency's backing.

The end of the war, however, brought with it inflation and renewed attention to the constitutionality of paper money. It was Salmon P. Chase who, first as the secretary of the Treasury Department, made the greenbacks possible. Then, as a Supreme Court justice less than a decade later, he made one of history's most famous flip-flops, ruling that currency notes were illegal. He made this determination despite the fact that the face printed on them was none other than his own.

A reshuffled Supreme Court--two new justices were appointed by President Ulysses Grant the same day of that initial verdict against paper money--would quickly reverse the ruling. Two subsequent decisions in what became known as the Legal Tender Cases sealed the deal: the Constitution may not explicitly grant the federal government power to issue bills of credit, but it had the implicit right to do so be- cause governing over a country, or at least this one, would be flat-out impossible without it.

Before the advent of a single circulating national currency, though, thousands of private banks issued their own notes, sometimes backed by bullion or coinage in a safe, but just as often backed by nothing at all. This was a monetary free-for-all, and--considering the greenback's universal acceptability now--it's strange to imagine how, less than 150 years ago, money in America was a smorgasbord. Countless varieties of paper money circulated throughout the land, most issued by unchartered "Wildcat" banks, and much of it of questionable authenticity and unstable value.

Even during that chaotic time, however, the paper's value always depended, at least in theory, on the idea that you could exchange it for a weight of gold or silver. The conviction that precious metals are value incarnate was still as strong as it had been 2,000 years prior. It was inconceivable that currency could have value without this link to metals-- that currency value might be fluid. That too would soon change, during what was the final stage in this metamorphosis from ancient money to the cash in your wallet.


The first step was in 1933, when President Franklin Roosevelt called in the public's gold supply as part of a radical effort to rebuild the economy during the Great Depression. Then in 1944, representatives of the major economies of the free world anointed the U.S. dollar to become the de facto currency of the globe--to replace gold, sort of. The dollar would still be locked at an exchange value to gold of $35 an ounce. Bizarre as it may sound, a small group of men sitting around a table determined that a 1-ounce nugget of gold would be worth, not $34 or $36.75, but $35. Other world currencies, instead of having their own correspondence to gold, would fix their value to the dollar, and wouldn't be allowed to change their exchange rates without special permission from the newly minted International Monetary Fund.

The rub was that this postwar agreement gave other countries the right to exchange their stashes of dollars for gold. By the early 1970s this policy, even if rarely acted upon, was becoming an increasingly obvious absurdity, as foreign banks held an amount of dollars equal to three times the amount of gold the U.S. owned. The situation aggravated foreign governments because a war- and deficit-weakened U.S. economy also hurt the dollar, and that in turn dragged down other countries' currencies and economies. Most prominent among the ticked off was France, which converted billions of dollars into gold, hoping other countries would follow suit and force the U.S. to get its financial house in order.

But others didn't follow suit. Instead, on August 15, 1971, President Richard Nixon severed the last remaining connective tissue between a material substance and national currencies. Nobody could exchange greenbacks for gold anymore. The number of dollars required to buy an ounce of gold would from here on out be determined by the markets, just like it is for oil, sod, dental equipment, and tulips. Currencies would be measured against each other, like untethered balloons carried on a breeze.


The dollar, meanwhile, remained the anchor currency of the world: the one ring that kinda rules them all. Other governments hold on to dollars and use them for paying debts, and in the aisles of the global supermarket of goods, most items are priced in U.S. dollars.

This is what's so weird about commentators in the U.S. proudly declaring that the dollar is the most stable currency in the world, as if this were because of American economic policy today, when it's really just the result of negotiations a few generations ago that made it the backbone of the whole system. The greenback is stable because the U.S. economy is huge and the United States is a terrific republic--OK. But it's also stable because everyone else's well-being depends on it, and on belief in its stability. That may be changing, though.

As for paper money itself, the end of the gold standard meant that cash had become a total abstraction. Its value now comes from fiat, government mandate. It's a Latin word meaning let there be. In God we better trust.

Hidden Kittens in China 100 Yuan Banknotes?

China Daily
Updated: 2012-02-06 17:55

A leading banknote and coin expert has denied a figure of a group of kittens appears in the new 100 yuan bill after a number of people claimed to have spotted the furry pets hidden in the banknote.

Internet users claim they found the figure of three kittens in the new fifth series of the banknote after close inspection under a magnifying glass, The Beijing News reported.

They claim two kittens appear opposite each other kneeling down with another in the center gazing with its mouth open

But Yuan Yinlong, a banknote and coin expert in Central China's Henan province, said the figures are just the work of the imagination of Internet users.

"Internet users purposely highlighted the lines to form the animal-like figure," he said.

Yuan also said the design of Chinese currency banknotes adopt advanced anti-forgery technology that is a state secret. The figures in the banknote seem to combine traditional elements and modern cartoon patterns.