Jason Bradford of Willits, California:
“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.”
Jason alerts us that this experiment is not unique:
“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.” (http://campfire.theoildrum.com/node/5158)