Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Spanish Town Reintroduces Peseta To Boost Economy

Recommended Posts

http://www.bbc.co.uk/news/world-europe-12657225

A small town in northern Spain has decided to reintroduce the old Spanish currency - the peseta - alongside the euro to give the local economy a lift.

Shopkeepers in Mugardos want anyone with forgotten stashes of the old cash at home to come and spend it.

It is nine years since the peseta was official currency in Spain.

But Spain's economic crisis has forced some to be inventive. The hard times have seen thousands of businesses close and more than two million jobs go.

Forgotten coins

More than 60 shops in Mugardos, a small fishing town in Galicia on Spain's northern coast, are accepting the peseta again for all purchases, alongside the euro.

It is an attempt to get cash registers ringing - and help lift the town out of a long and painful economic slump.

Shopkeepers were sceptical at first, but they now say the scheme is a great success.

People are travelling into Mugardos from outside just to spend the old currency they never got round to converting.

One man visited the local hardware store this week with a 10,000-peseta note he had found at home, and had no idea what to do with.

He is now the happy owner of a sandwich toaster.

The euro was introduced here in January 2002.

Spaniards then had another three months to exchange their old currency at any bank.

That cash can still be converted today, but only at the Bank of Spain itself, and it says a staggering 1.7bn euros ($2.4bn) of cash is still unaccounted for - stashed, perhaps, then forgotten; piles of coins that slipped down the backs of sofas; or even big notes kept by collectors.

That is the reserve the shopkeepers of Mugardos are hoping to tap and give a desperately needed boost to business.

Still, the Bank of Spain estimates that almost half the country's millions of missing pesetas will never be recovered - despite their value.

Trouble is this is a one off boost, once the old money has been converted into Euro's the boost will be over.

Still at least the Spanish economy is recovering and showing no signs of desperation.

Share this post


Link to post
Share on other sites

There's a good business opportunity there for anyone who wants to start forging peseta coins and notes. Given that they've been out of mainstream circulation for so long, people will be less used to examining them and so it'll be a lot easier to pass off counterfeits, I guess.

Share this post


Link to post
Share on other sites

There's a good business opportunity there for anyone who wants to start forging peseta coins and notes. Given that they've been out of mainstream circulation for so long, people will be less used to examining them and so it'll be a lot easier to pass off counterfeits, I guess.

Even at the central bank? :)

Although this is an interesting point I wonder how much in forged peseta's remain out there?

Share this post


Link to post
Share on other sites

Trouble is this is a one off boost, once the old money has been converted into Euro's the boost will be over.

Who says they have to convert them to euros?

I spend 1,000 pesetas on a toaster in the hardware shop, then the hardware shop owner spends 1,000 pesetas down the fruit market, then the fruitseller spends 1,000 pesetas paying me to paint his fence. It can just keep going round and round without ever being converted to anything, that's what currency is.

I guess people might say that you have to pay your suppliers and taxes in euros, which is true, but they haven't stopped doing business in euros so they can trade with outsiders in euros and shop within the village in pesetas.

Share this post


Link to post
Share on other sites

Who says they have to convert them to euros?

I spend 1,000 pesetas on a toaster in the hardware shop, then the hardware shop owner spends 1,000 pesetas down the fruit market, then the fruitseller spends 1,000 pesetas paying me to paint his fence. It can just keep going round and round without ever being converted to anything, that's what currency is.

I guess people might say that you have to pay your suppliers and taxes in euros, which is true, but they haven't stopped doing business in euros so they can trade with outsiders in euros and shop within the village in pesetas.

I had thought about that, the trouble is will be inflation and currently the peseta is fixed against the Euro, so in theory it will be losing value. However if people perceive it to be worth more it would be interesting to see how the ECB would react.

Share this post


Link to post
Share on other sites

Who says they have to convert them to euros?

I spend 1,000 pesetas on a toaster in the hardware shop, then the hardware shop owner spends 1,000 pesetas down the fruit market, then the fruitseller spends 1,000 pesetas paying me to paint his fence. It can just keep going round and round without ever being converted to anything, that's what currency is.

I guess people might say that you have to pay your suppliers and taxes in euros, which is true, but they haven't stopped doing business in euros so they can trade with outsiders in euros and shop within the village in pesetas.

and pay their public servants in the village in pesetas....

Share this post


Link to post
Share on other sites

and pay their public servants in the village in pesetas....

Yes, but that's the whole point, these Pesatas are a more valuable trading currency because they are only spent on things the holder wishes to spend them on. There are no "bouncy castle co-ordinators", nobody paid to sniff the inside of a company car to check whether somebody has smoked a cigarette in it, you get the drift...

Share this post


Link to post
Share on other sites

Yes, but that's the whole point, these Pesatas are a more valuable trading currency because they are only spent on things the holder wishes to spend them on. There are no "bouncy castle co-ordinators", nobody paid to sniff the inside of a company car to check whether somebody has smoked a cigarette in it, you get the drift...

More valuable until transactions in them are taxed. So then we need to find a way to prevent transactions becoming taxed in a new local currency medium.....

Share this post


Link to post
Share on other sites

I am pleased to report that because of the actions of that small town there has been an immediate effect throughout Spain . So much so that in the center of our local town in Southern Spain a plot has been cleared and a brand new notice put up to tell us that we can have an apartment with a garage for 100,000 Euros at 5% interest rates and payable over 40 years . So its all over ,back to normal ,mind you we came close to disaster didn't we.Phew !

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.