A new global currency, the Crandall, will be arriving in October. That's just three years and two months after it was predicted to arrive by your relentlessly insightful columnist. The idea of the new currency was part of my Fearless Forecasts for 1997, quoted below.
"The Dollar Will Be Saved. Just don't forget that you read it here first. As the trade deficit continues to rise and insensitive foreigners grow restive with piles of our monochromatic money, the dollar will start to fall. The insensitive foreigners will tell our government they no longer wish to receive Federal Reserve Notes that are only exchangeable for more Federal Reserve Notes. The dollar will be saved when Treasury Secretary Rubin announces a brilliant solution: The Crandall. Beginning July 4, 1997 all U.S. dollars will be freely convertible into Crandalls. The Crandalls, named after American Airlines CEO Robert Crandall, will be convertible into Aadvantage miles, the only currency hoarded and accepted around the world."
The Crandall will be arriving in the nick of time. One of the very clear messages from reader suggestions to Peoples' Money Management 101 was that most of us are absolute freaks for the air miles we get from flying and using our credit cards.
Of course, you won't actually be trading in Crandalls but it all comes to the same thing: at Milepoint.com, a new venture formed to convert loyalty program miles into retail spending, we will be able to use our air miles as a currency for the purchase of goods and services.
And that's a good thing.
Why? Because Milepoint says that the six participating airlines have some 45 million mile holders with a total of 1.6 trillion air miles. (The initial airlines are Delta, Northwest, Continental, US Airways, America West, and TWA. On the retail side, their initial partners include Amazon, Skymall, Sharper Image, Orvis, and others.) They also say that they will be converting each air mile into 2 cents of "Milepoint Money" which, when you do the math, turns into about $32 billion in retail purchasing power.
Just to put that in some perspective:
• $32 billion would buy about 1.3 million new $25,000 cars.
• It could also be used to provide all of Dell Computers' sales for a year with about $4 billion left over to fritter away.
• It would keep Delta Airlines in the air for about 2 years. Alternatively, it would keep Northwest, Continental, US Air, America West, and TWA, combined, in the air for most of a year.
• Looked at another way, that $32 billion is more than we collectively added in non-revolving consumer debt since January.
Small wonder that air miles have become significant items in divorces. Or that some attorneys are recommending that people include air miles in their Last Will and Testament.
You can learn more about the program by visiting the Milepoint.com website and reading about "member benefits." There, Mr. Crandall--- an advisor to Milepoint--- will tell you "we are turning frequent flyer miles into online money."
Unfortunately, there is also the fine print.
Sadly, air miles aren't a complete substitute for greenbacks. While the program will allow you to pay for 10 to 25 percent of a retailers' product with air miles, you'll still need cash for the remaining 75 to 90 percent.
That's not good news for the millions who are rich in miles but poor in cash.
But hey, why worry? Charge the balance and get more miles.
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