You can't afford items in euro yet a TEM equals a Euro? 

It's nothing new. Either it is just the EUR with a mask on because they keep the EUR to cash people out or they don't keep it all and it's a bank in disguise.

it's the helicopter effect of giving money away in a new system of money. a certain cryptocurrency you may or may not be familiar with is in the process of doing the same thing right now.


I have not delved into it, but it does not appear to be a loan.  "It works as an exchange system. If you have goods or services to offer, you gain credit, with one euro equivalent to one TEM."


Could you explain what you mean by zero sum? And perhaps expand on "inflationary by design"? If they had said, "we will start with 10 quadrillion TEM and give a 300 TEM credit to each person who signs up" is this system more or less inflationary than one that just adds 300 credits to the economy for each person that signs up?


Isn't this the absolute foundation for money?

I know what zero sum means, but explain why you brought it up or why this is something significant to even mention, I guess.


Ok, I see that you just want to say "it's inflationary" because that's a dirty word around here.

Maybe someone should set up an exchange between Bitcoin and TEM.  If I were in Greece, I would want to turn some of my TEM into BTC.  Anyone have an idea of a TEM BTC price?

So far the only evidence I see that this is "debt-based" is from the posters in this thread. In fact, the OP even quotes part of the article where it says "you earn credit by offering goods and services."

Telling people to buy bitcoin when they can't buy food because they have no euros has got to be some of the most short-sighted shit I've ever seen on here. And you claim somebody "doesn't get it."

Man I don't even know why I bother.


I would say you have absolutely no idea what you're talking about. There is no interest owed and there is no bank, centralized or not, that has to be repaid. Explain to me how this is a debt. Explain to me in what way you could bootstrap a currency without requiring work performed that isn't debt-based under this ridiculous definition. Helicopter dropping money? Ah well, here is the same helicopter except it is slightly more discerning about where it drops its money: to people who provide goods and services.


It is not affected by the problems of the euro because, newsflash, it's not the euro. Nor is it pegged to the euro by any matter other than convenience and as a way to bootstrap. Collapse of the euro would not cause a collapse in TEM.


This means you literally believe the following: the euro wealthy should be able to buy up as much property and other material wealth as possible while greece is in a recession and many people starve, all due to the incompetence of politicians. What a revolting statement. I can see why you're so fond of bitcoin. And I can see that your posts are not ever again worth reading.

Etlase2,

Debt is not defined by the presence of interest.

See wikipedia on Debt.

TEM has a fixed exchange rate with the Euro (1 TEM = 1 EUR), in other words, there is someone who promises to redeem them at a predefined rate. If the market price of euro collapses, so will the market price of TEM. This behaviour is the same as other money substitutes, such as bank notes (in case of a gold standard) or current accounts (except it's not controlled by the banks). An attempt to decouple them would cause arbitrageurs to equalise them again. This arbitrage also serves as a limit on the creation of additional units. Due to transaction costs and small size of LETS economies, this is imperfect, so there is a certain level of disparity. But as soon as the disparity increases sufficiently to overcome the transaction costs, arbitrageurs will appear.

Only if the redemption ceased for some reason (for example, due to lack of reserves or market power), then the price would decouple. I think that this would cause a more rapid increase in the amount of TEMs in circulation (because it's a creation of new money at a zero interest rate) and a relative fall in the market price of TEM compared to EUR, but I am not completely sure about this. I was unable to find Austrian writings about LETS, so the only variable I can somehow find relevant is the interest rate.

Just out of curiousity, can you show me an example of a system like TEM or LETS that does not have a predefined exchange rate in units of other currencies or commodities?

You are imagining things. I never said that people should not use TEM. Austrian economics is not about should (normative statements), it is about is (positive statements). I claim that systems like LETS or TEM do not fix what I perceive the main problems in the current monetary system. I also said in the past that such systems reduce the scope of the economies. This also decreases the specialisation of labour, and that will make the society poorer. If people want that, alas, let them have it. However, as explained above, on a free market, I don't expect such systems to play a significant role.

Most importantly though, you did not address my points. Rather you react as if I objected to your ideological goals or something. However, I am indifferent to your goals. I'm merely analysing the the economic foundations of your position and attempting to derive the consequences thereof.

The creditor is the person who sells the goods/services against a newly issued TEM. The debtor is the person issuing the TEM. Austrian school explains why: credit is an exchange of present goods for future goods.


http://www.nytimes.com/2011/10/02/world/europe/in-greece-barter-networks-surge.html?pagewanted=all

http://www.npr.org/2011/11/29/142908549/modern-greeks-return-to-ancient-system-of-barter

http://www.bbc.co.uk/news/world-europe-17680904

(emphasis added)

If there is free market, it's exchangeable. The peg is just obfuscated because there is no central redemption instance and no specialised markets. But, as I said, once the price discrepancy exceeds transaction costs, arbitrageurs will appear.

The person that sees an arbitrage opportunity and wants to make a profit on that.

You just discredited yourself.

Not all money is debt, because some money is a present good and is not created by a credit transaction between two market participants. This is particularly true for commodity money, such as gold. Gold is retrieved from, say, mines. This retrieval increases its supply, but it's not a credit transaction. Rather, it's a production process that creates a new good.

Of course it does. As I said, it's just obfuscated due to a lack of a centralised system and specialised markets. Let's say that someone in the community is selling radios for 100 TEMs and someone else apples for 1 TEM each. If a radio costs 90 EUR outside of the community and apples 1 EUR, if we ignore transaction costs, someone could buy a radio for 90 EUR, sell it in the community for 100 TEM, buy 100 apples with them, and sell the apples outside for 100 EUR. This nets him an arbitrage profit of 10 EUR. This puts a pressure on the community radio seller to decrease the price, and on the community apple sellers to increase their price. Since money is what connects all transactions, an increased number of products will shift the pressure onto the price system.

Again, you ignore elementary economics.

The equivalency is also in their actions. They use it in trade for the equivalent value. There does not need to be a centralised authority for this (in fact, I explicity said that). But this is not automatic. If they deviate from the equilibrium (stop treating them as having the same value), either the arbitrageurs will reestablish the equilibrium again, or the whole system will collapse.

You have failed to provide a response to my points, and continue to ascribe to me positions which I never expressed.