So during the lull between WWI and WWII there was this worldwide problem.... a depression and no prozac available.
In germany, where there was simply not enough money to get public services working, one small community figured out an answer. They printed their own money. Separate from the central bank. The money had an interesting twist. It reduced in value on a regular basis until it expired on a preset date from when it was first issued. The net result was that the municipality had the money to pave their roads, collect their garbage, put teachers in their school, etc... The community could not hoard the cash, the major cause of that particular depression, because it would be worthless soon. Instead it had to be spent. This created an active local economy, in a town with a working infrastructure. Instead of encouraging this activity, or even more amazingly following suit, the central bank freaked out. They sent in the cops to stop this funny money routine and that small town quickly returned to a depressed economy with a failing infrastructure.
(Allow yourself to think about what would have happened if this had caught on. Germany would have led the world out of the depression. Much of the anger towards the allies that fueled Hitler's rise to power would have been missing. It is possible that WWII would not have happened, though that might be stretching it. At the very least we would all be carrying two types of currency (long and short term), a whole new set of currency and futures markets would exist, and counterfeiting would become a hell of a lot more interesting.)
Almost a century later, a similar item is starting all over again (although upstate New York has had several communities that run something like this for many many years).
Germans take pride in local money
By Tristana Moore BBC News, Magdeburg, Germany |
The next time you venture out for lunch in Magdeburg, check what kind of loose change you have in your wallet.
The local banknotes are issued at a rate of 1:1 to the euro |
Like any other city in Germany, the normal currency here is the euro. But bizarrely, they also have another currency in circulation: the Urstromtaler.
Before you doubt its existence, it is not "Monopoly" money - it is very real. At a jewellery shop in the city centre, Gerfried Kliems explained how people use the regional currency.
"It's quite simple," he said. "The money you spend stays in the region. When I accept Urstromtaler in my shop, I then have to see how I can spend the local banknotes. You get to know everyone who's participating in this project, and at the end of the day, you have a good feeling about life."
More than 200 businesses are using the regional currency, including shops, bakeries, florists, restaurants. There is even a cinema which accepts Urstromtaler.
http://tinyurl.com/3yr5gk
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