It takes a crisis to encourage a new way of creating money

Local Exchange Trading Systems have been around for some time but it appears it takes a financial crisis to bring them into their own.

Here are some links to news reports about the TEM currency being used in parts of Greece to replace the Euro. One,   two,   three.

So far as I can see the TEM is a LETS under a different name, maybe because of the different language.

I very much like the concept because it is a different way to create money.  It does not involve banks and loans and interest rates all of which are problems with the way our economy currently creates money.

It is sad that it takes a large-scale crisis to encourage this type of money system.  It is also sad in that the local scale limits it use and restricts the exchange of goods and services to just people in a local district.  To be really useful it needs to be expanded to a national level.

The development of the TEM illustrates that while a financial crisis can cause a lot of human suffering it is not the end of the world.  Recovery is possible.  I wish we could say the same about the other aspect of the current crisis – the depletion of the most easily accessible energy and mineral resources.

 

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One Response

  1. I am writing a book about the creation of money and the related issue, optimal currency areas.

    You do not need governments or banks to create money. Individuals can and do create money if the have sufficient credit, and the recipients of the currency believe that they will be repaid at any time later.

    Money creation always occurs if there is shortage of currency in the economy. Several towns around the world circulate their own currency, including the town of Totnes, England, which issues a note which floats against the Pound. In an extreme case coupons cut from magazines circulate as currency in certain areas of Nigeria (preferred to the national currency which inflates).

    So this Greek isalnd is the next example. I will have to visit on my next holidat. It will give me an excuse.

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