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What is a Local Exchange Trading Scheme?

LETS are a form of club allowing members to buy and sell goods and services without using cash. A local currency is used (in the case of LETSBuzz, the Buzzard), and members agree prices in this currency. The system works in a similar way to barter, except that trading can be with any other member of the scheme: you can 'buy' a service off one member and even up the account by 'selling' to another. (In some cases - for example, where a plumber has to buy copper pipe - trades may be agreed as part Buzzard/part cash).

Members of LETS receive a directory, a sort of 'yellow pages' for the scheme, listing all the skills and services available. To arrange a trade, they just contact the other member and make whatever agreement they wish.

The Buzzard has no value outside of the scheme, and it cannot be borrowed, invested or banked. Interest is never earned or paid. There is no central bank and no limit on the amount of currency in circulation. Currency is created by trading: for example, Joan agrees to give Fred an aromatherapy session for 30B, so Joan gets 30B from Fred, who is then in commitment to the tune of 30B. Fred has accepted a commitment to do 30B worth of work, and Joan has 30B to spend.

LETS are set up to encourage the development of a strong local community and a strong local economy, with access not limited by cash restrictions. They help to keep resources within a community, making them available preferentially to members of that same community.

LETS are self-regulating and non profit making. They are controlled by regular meetings, which anybody can attend, and many LETS also offer a social calendar. LETS keep their cash costs as low as possible, to make membership more affordable: newsletters may be delivered by a member earning some local currency, rather than posted, for example.

Within a LETS, prices are set freely by agreement between members and nobody is ever required to trade. The system relies on trust (in the above example, the other LETS members are trusting Fred to honour his 30B commitment) and if you don't trust somebody, you don't have to trade! That said, LETS are local and it is quite possible to know all the other members of the scheme - one important benefit of joining a LETS is a wider circle of friends than before.

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