Riverwest, Milwaukee's Recession Plan: Print Own "River Currency"

People nationwide may start hoarding their cash as recession fears grow. But in Riverwest--a progressive enclave of Milwaukee--residents have another answer to their money trouble: they'll print their own. The proposed River Currency would be used like cash at local businesses, keeping the area economy humming whatever the health of the country at large. "We can create our own value," explains Sura Faraj, 48, one of the plan's organizers.

It's an attractive idea when times are tight. Communities print what look like ordinary bills with serial numbers, anti-counterfeiting details and images of local landmarks (the Milwaukee River, for instance) instead of presidential portraits. Residents benefit through an exchange system: 10 traditional dollars, for instance, nets them $20 worth of local currency. And when businesses agree to value the funny money like real greenbacks, they also get a free stack to kick-start spending.

Read the whole story here.

Comments

[JTaverner]

Good to hear my old haunts are still progressive as ever - 3219 Booth St 2001-2002!

[kstuff]

Is this legal? We could definately use this in Michigan.

[northstar11]

"and when businesses begin to value the 'funny money' like real greenbacks"

now that is really funny.-- at the rate they are printing greenbacks how can you tell the difference.

[Pdubya]

i'll tell you how: the "funny money" is issued by representation, and not a centrally controlled cabal. as well, the money is backed by production or real savings, not derivatives or thin air computer entries.

good on em. i'm buying more gold and silver.

[pointyheadprodigy]

And leave the stalwart figures of tradition and authority out of the loop of economic values? I LOVE IT!

[Sundialsvc4]

Although this practice will be quickly stopped ... only the Federal government can issue currency "and regulate the value thereof" ... let it be said that what this resourceful town proposes to do (to issue "scrip") has no more AND no less "intrinsic value" than what the Federal government is doing.

And what IS the Federal Government doing? To illustrate, kindly pretend that you have one silver dollar in your pocket. Eight of my friends will now sell the right to collect that one dollar, thus producing eight dollars in currency. They will each use their "dollars" in the same manner, with eight of their friends.

How many times do I have to do that in order to produce, from your one silver dollar, $200 billion? According to my trusty calculator, I need repeat that process a mere 8-1/2 times. Furthermore, we can sell those "derivatives" among one-another (thus inventing the "futures exchange") without actually needing 200 billion friends to trade with.

This is why all that "money" is bouncing around. And if you happen to turn-out your pockets, showing that you never actually had a silver-dollar in your pocket in the first place ... I don't even have to care.

We would have been far better off if we'd been using tulip bulbs, because you actually have to grow them.

[theiccemann]

There is no crime against barter. You can use rocks, to offer trade, just as long as people agree to the value of it. If the government can't resolve situations, why can not a community of people come together and get it done?

Heck, they can exchange different colors of leaves. Is the govt going to step in, and say, "Hey! Stop that! You must suffer with the rest of us."

[Tom95134]

This is not "barter" it is printing money which is illegal. Also, they have to report on taxes it just like regular income.

[Sumocat]

That's technically not true. Congress has the power to coin money and enforce legal tender, but that does not prevent communities from issuing their own local currency. In fact, it occurs on a regular basis, so I'm not sure why this is even a notable story.
http://en.wikipedia.org/wiki/Local_currency

I still have a Maui dollar in my collection.
http://en.wikipedia.org/wiki/Maui_Trade_Dollars

[Pdubya]

congress has the power, yes. but, they haven't used it for some time. they "appropriate" money, but the Federal Reserve only has today's authority to issue it. btw, the Fed issued 630 billion a week before the staged argument over the authority for them to issue 750 billion bailout.

END THE FED.

[DonCosenza]

Your explanation of fractional reserve is a bit off. It goes more like this: Imagine you have 8 dollars in your pocket that you are holding for 8 of your friends. You loan out 7 of them, but you also guarantee your friends that each can collect their dollar any time they want. Thus, there are now $15 in the money supply- the original $8 in demand deposit (saving/checking) and $7 of bank money.

The $1 you keep on hand is your reserve. Assuming 1/8 is the reserve requirement, the theoretical maximum amount of new money that can be created from the $8 in deposits is $64. This limit is called the money multiplier and is equal to 1/[reserve requirement].

As for derivatives, these are not managed by the Federal Government (they're barely regulated), and most derivatives (especially the CDOs and CDSs at the heart of the current meltdown) are significantly more complex than what you have described.

[Peter007]

I have a question. If you lent me the 7 coins, could I not go to your brother and ask him to hold the 7 coins in his pocket for me. I understand he has friends that may want to borrow the coins too.

[FDRJFKLBJ]

Your explanation of fractional reserve is completely WRONG.

Do more research.

[jsarets]

No... Only the federal government can declare a currency to be legal tender and require suppliers to accept it as payment, but anybody can decide to print money, and any supplier can agree to accept it as payment. The difference is that suppliers can reject the barter-money notes, but they can't turn down a Federal Reserve Note.

[Peter007]

I think a company in Idaho was storing silver and if you wanted to own the silver but not take possession of it you were issued a certificate. A silver certificate. The government came in and closed them down and seized all the assets. The owner is trying to get back his assets through the courts but the government doesn't want the courts to be involved and are stalling the proceedings.

[Pdubya]

wrong. our constitution states what legal tender is. the federal reserve is neither federal nor does it have any more reserves. they are the counterfitter.

www.endthefed.us
www.silverbearcafe.org
www.mises.org

[alienufo]

i've got some monopoly money in the closet.