Wikinvest Wire

Local currencies now thriving

Monday, August 17, 2009

This story about local currencies must have popped up in about ten different places since it was published last week at the LA Times. The public apparently has an odd fascination with the idea that something other than the U.S. dollar might be also be worth something more than its intrinsic value of zero.

Local currencies cash in on recession
Communities in North Carolina, Massachusetts, Arizona and elsewhere print their own money to encourage shoppers to patronize local businesses. Local money was last popular during the Great Depression.

The stimulus for this mill town turned artist's colony arrived in the form of green bills bearing sketches of herons, turtles and trees.

A few dozen local businesses banded together this spring to distribute the Plenty -- a local currency intended to replace the dollar. Now 15,000 Plenties are in circulation here, used everywhere from the organic food co-op to the feed store to, starting this month, the Piggly Wiggly supermarket.

Last popularized during the Great Depression, scrip, or locally created stand-ins for U.S. currency, is making a comeback. Pittsboro, population 2,500, is one of a handful of communities that launched its own money in recent months. It reports an avalanche of calls from other communities that have lost faith in the global financial system.
Treasury Secretary Tim Geithner and Federal Reserver Chairman Ben Bernanke are certainly not going to like the sound of that - competing currencies.

The thing is, this particular currency is much better looking than the staid old greenback, even after its recent redesigns.
IMAGE And the "Plenty" will probably hold its value better to boot.
"The Plenty is not going to get siphoned off to Wall Street, or Washington, or make a stop in Bentonville on its way to China," said B.J. Lawson, a software entrepreneur who is president of the board of the Plenty cooperative. "It gives us self-reliance."

Over the last two decades, a few communities have created their own cash in an effort to preserve local ties or businesses.

These whimsically named bills -- such as the "BerkShare" or the "Cheer" -- can be spent at neighborhood merchants, who then can use them at other local shops or, should they choose to, trade them in for dollars or other goods.

So far, none of them face the extreme pressures that popularized scrip during the Depression -- bank failures that dried up the supply of cash in circulation, requiring governments to come up with novel ways to keep commerce alive.

"Right now there's a lot of interest because of the economy, but a lot of these efforts come about to rebuild social capital," said Ed Collom, a sociology professor at the University of Southern Maine who studies local currencies. "There's been concern about lack of trust, neighbors not knowing each other. They see this as a way of neighbors helping each other."
A few local businesses reportedly pay their employees with Plenties.

They better be careful, because, according to this report out of Las Vegas, the government doesn't like that sort of thing one bit.

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Anonymous said...

I wouldn't compare tax cheats to communities trying to build prosperity together.

marku said...

When banks are hoarding and money velocity goes to near zero, this could make a lot of sense. And as the guy pointed out, "these don't go thru Bentonville on their way to China"

Anonymous said...

Yeah, the system has to be changed legally. Congress has to de-charter the central bank, and put a currency in its place that will hold its value over time. Write your Congressmen and Senators.

Anonymous said...

Congress only has to repeal legal tender laws and both the Feds and the central bank would be cut off. And on the subject of tax cheats, who is the biggest cheat of them all anyway? I sympathize with anyone who doesn't want to pay their taxes. In the end, what do you really get for it?

Jonah said...

These so-called local currencies are laughable. It's like complex local coupon clipping. They're all backed by FRNs. Poor pathetic bastards need gold and silver in their lives. But they'll go on pretending to live in a free country when they're not even free to use real money. Ignorance breeds poverty

Anonymous said...

As noted--these are not currencies, they are coupons. Everything that suffers the dollar will happen to these also, because that is the valuation they are based on. ...And that's the ONLY reason they're being allowed.

An alternate currency would be something that has independent valuation, such as the Liberty Dollars,,, but we know what happened to them. The US gov won't allow any "money" that they can't control the value (inflation) of.

People that think these are a "great idea" simply don't understand the situation. The real problem is not that you don't have enough pieces of paper in your wallet.


King of the Paupers said...

Jct: When the local currency is pegged to the Time Standard of Money (how many dollars per unskilled hour child labor) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
See on growth of the international time-trading network.

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