In the event of a global economic collapse or catastrophic drop in the value of the U.S. dollar, Petrolia residents could be sitting pretty. That is, if they are savvy enough to invest in Petols, the newly minted silver currency slowly circulating in the Mattole Valley and beyond.
Ken Young, a maverick Petrolia resident — redundant, perhaps — is the mastermind behind this new money. A humble, lean man, Young describes the Petol as his legacy to a community he clearly cares deeply about. His own nest egg covered the bill for the first 2,000 Petol coins, which are selling for around $17 US dollars, depending on the value of silver.
Young felt compelled to create the Petol in response to what he believes is a wildly out-of-balance money system in the United States, and as part of his quest for building a sustainable society. In order to achieve a sustainable community, “culture, economy, and ecology have to be in balance,” opines Young. By creating an independent money system that holds its value, the Petol is “a step in the right direction.”
Sitting behind a table displaying juicy red tomatoes, homemade salt and Petols, Young is a fixture at the monthly farmers’ market at the historic Mattole Grange Hall. Approach his table and you are most likely to be greeted by him saying, “I bet you’ve never seen real money before.” Offering his controversial perspective on the US monetary system, Young emphasizes two ill-fated events: the formation of the Federal Reserve Bank and the abandonment of the silver standard.
On a dark day in 1910, a handful of the wealthiest bankers in the world met with a few senators and identified a lucrative opportunity to establish a federal bank to manage the US money system. In 1913, the Federal Reserve was born, and the power to issue money was transferred from the federal government to this newly formed private corporation. Though the U.S. Constitution requires silver or gold as backing for all currency, by 1965 Federal Reserve notes were no longer payable on demand in silver to the bearer and the silver standard became a thing of the past. Dollars ceased to be a “store of value”; instead their value lay solely in their use as a medium of exchange. “U.S. dollars are not backed by anything. It’s fiat money, decreed by the government to be accepted in payment of debt ... no fiat money in the world has ever lasted much more than 50 years,” purports Young.
To make matters worse, the Federal Reserve has created a debt-based monetary system which relies on fractional-reserve banking techniques which undermine the value of the U.S. dollar. “The whole system is unstable. We can’t get to a sustainable society with a debt money system,” Young asserts. By insulating the community from an economic collapse, Young believes the Petol can strengthen the self-sufficiency of the Mattole Valley and provide a counterweight to inflation.
Though contentious, Young’s skepticism about the U.S. monetary system and the Federal Reserve are shared, at the very minimum, by most Libertarians. Among them, Texas congressman Ron Paul, the anti-war, anti-choice libertarian physician who is running for president on the Republican ticket. Among other things, Paul is calling for a return to the silver and gold standard and the abolishment of the Fed. His face is even emblazoned on the Liberty Dollar, a true silver dollar that was minted by one of his fans and is circulating throughout the country.
Though dozens of local, alternative currencies exist, the vast majority are used exclusively as a means of exchange, not as a store of value. This is what sets the Petol apart from most other local currencies, such as Humboldt Exchange’s Community Currency. Humboldt Exchange’s currency is accepted as partial payment at a number of local businesses and is successful as a means of purchasing goods and services. Because it is paper, however, it lacks its own intrinsic value and cannot be exchanged outside of the community for U.S. dollars. The Petol, in contrast, because of its value in silver, has a cash value worldwide.
After just a few months in existence, more than 400 coins have been sold, mostly to collectors, and reside in places as far off as Newfoundland. Right now, Young is happy to sell Petols to the curious via the Petrolia Coin Shop. Down the road, he hopes to see the Petol in use as a method of payment for goods and services throughout the Valley. Ultimately, he envisions the creation of the Mattole River Bank, which would give loans in Petols to year-round residents for the creation of sustainable businesses that would serve the community. Ideal loan-worthy ventures would be projects like biodiesel production or an electric power cooperative, says Young.
Petols are already accepted as payment at the monthly farmers’ market, and Young is certain that practice will expand to other commerce in time. Jackie Roscoe, Petrolia postmaster, says she’ll never take Petols at the Post Office because, as she explains, “I don’t own the Post Office and it’s not real money.” Like many people just learning about the Petol, Roscoe struggles to imagine how it would really work as actual money. Even though local residents could use it for individual transactions. “We have to pay rent and pay the gas man and they aren’t going to take Petols,” she reasons. But she adds that she has bought some of the coins for herself, because she considers them beautiful.
The coins, currently available only in 10 Petol denominations, are quite stunning. Their thoughtful design depicts three elements of sustainable food production: ranching, gardening and gathering. Next year, Young hopes to have smaller denominations minted that will feature the themes of transportation, energy and clothing/textiles.
Rick Moorehead, a holistic health practitioner, is already accepting Petols as payment for his services. He has set a price in Petols for his treatments and even offers a discount to clients using them for payment. “I’d rather be paid in silver or gold than in U.S. dollars, because it’s real money,” Moorehead says. “Federal Reserve Notes are just IOU’s, they’re basically debt-notes.”
As for whether Petol holders can use their shiny new silver for supplies at the good old Petrolia General Store, owner Denise Goforth says she has made no decision about whether or how the Petol will be used: “I don’t know anything about it. I’ve heard of the Petols, but no one has approached me about taking them here”.
When the time is right, Young will spread his Petol gospel to people like Goforth. He’s in no rush. In the local race for sustainability, Young maintains that Petols are a “little step toward freedom ... it’s revolutionary.” And with his disarming smile and glimmer in his eye, he adds, “I’m a troublemaker.”
Jenoa Briar-Bonpane is a high-school counselor who lives, mothers and writes in Petrolia.