Last year, the Federal Reserve Chairman Ben Bernanke announced an increase in the amount that the Federal Reserve Banking system will charge for overnight banking. That decision, along with other factors, is causing members of our community to experience the affects of the declining purchasing power of the US dollar. For example, last year this time it cost the average Philadelphian $30 to fill up a 13.2-gallon gas tank. Today, it costs them $45 to fill up the same gas tank. The $100 spent at the grocery store last year, buys the average person less groceries this year.
As a result of these difficult times, the Equal Dollars Community Currency Central Banking Committee was motivated to meet and make the subsequent decision to separate the value of the Equal Dollars currency from the purchasing value of the U.S. dollar. This action will take place effective May 15, 2011.
We understand and respect the reasons why those who manage the U.S. dollar purchasing value believe that it is best if that currency reduces in its purchasing value year by year. We also understand and respect that there are many economic theories that justify that such a reduction in value is good. It affects "costs of labor" and creates a pressure on labor to seek employment so as to cover basic living needs, etc.
However, the Equal Dollars Committee re-affirmed its purpose - that creation of a complementary currency is aimed at providing a stable value for the exchange of labor and goods without interest charged for the use of currency nor interest paid on the accumulation of currency in accounts. We believe that in order to maintain that stable value over years of time we will need to re-establish the value of our local trading currency relative to the decreasing purchasing value of the U.S. Dollar.
The Equal Dollars Banking Committee determined the following:
We will reduce the Equal Dollar to .80/eighty cents on the U.S. Dollar.
Adjustments to member accounts balances will be made on May 27 by increasing those amounts by 20 percent.
We will reduce outstanding loan principle amounts by 20 percent on May 27.
At this time the recommended Equal Dollars hourly minimum compensation for labor will increase to 15 Equal Dollars.
We are not the first group that has issued and used a local currency for exchange that operates separately from the rules established by those governing the official currency in use.
Other communities around the world have determined that they need a way to exchange the value of their goods and services. Each of these communities then had to determine the rules that they will use to manage the exchanges they started. Our Equal Dollars system has recently grown substantially, with more than 1,000 individual members; 35 organizations and corporate members; 90K units of Equal Dollars out on loan and over 170K Equal Dollars in circulation.
The Equal Dollars Banking Committee decided it was timely for us to clarify issues relating to the community's agreement on the minimum payment for an hour of labor, currently at 12 Equal Dollars for an hour by increasing it to 15 Equal Dollars. By shifting the Equal Dollar valuation to .80/eighty cents on the U.S. dollar, the increase will not increase the tax obligations.
The Equal Dollars Banking Committee is pleased to bring the results of its deliberation to you. Please continue to indicate your reactions and suggestions to Deneene Brockington, our chair, at Deneene@rhd.org or (215) 951-0300 ext. 3027 so that your views will be taken into consideration as we move forward. We will also call open meetings of the Banking Committee for current members in the next few months to hear your thoughts.