The dollar has some competition in Traverse City, Mich. The contender is the Bay Buck, a colorful currency launched last fall. To be sure, it isn't about to replace the dollar anytime soon. And at Wal-Mart Stores and Starbucks, it's as useful as Monopoly money.
But Bay Bucks can be used to pay for real goods and services, just like dollars can. And supporters say that using Bay Bucks promotes the local economy.
Bay Bucks are a local currency--one of a handful circulating in the U.S., including Burlington Bread, Ithaca Hours and, soon, BerkShares in Massachusetts. Besides being fun to trade and talk about, these currencies are meant to circulate near their home base, not to be ferried off to corporate headquarters in Arkansas or Seattle.
Local currencies are an old idea. Thousands of them were used during the Great Depression, according to Bernard Lietaer, author of The Future of Money and a former currency trader who helped implement the euro. They're a subset of a grouping called complementary currencies, which also includes airline frequent-flier programs.
At present, local currencies don't affect the conventional economy--our dollar economy--much, because they have such limited circulation. Only $12,000 worth of Bay Bucks have been issued, for example, compared with some $700 billion worth of dollars. But the point of local currencies is also to boost the value of resources, such as local labor, that are undervalued in the dollar economy.
So are these things legal? Lewis Solomon, a law professor at George Washington University and author of a book about local currencies, says local currencies are legal with some stipulations, including that they have to be printed (not coined) and that local money cannot resemble dollars.
By most accounts, local currencies resurfaced in the U.S. in 1991 in Ithaca, N.Y. Then-resident Paul Glover, now living in Philadelphia, says many of his neighbors were unemployed or underpaid, and he was looking for a way to fatten their wallets. He and a group of supporters created the Ithaca Hour, each one equal to either $10 or one hour of work.
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They may be talking funny money, but it's not funny business.
Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with a recession.
"You have all these people who have local currency, and they're going to spend it at local stores," said Sura Faraj, a community organizer who is helping spearhead the plan. "They can't spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store."
Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.
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The head of an Orlando nonprofit that backed a plan to create a new "private" currency is suing the man behind the project along with several of their former associates, claiming that she is a victim of their own money-making scheme.
Josefina Calderon, who persuaded dozens of Hispanics to fork over money to refinance their mortgages with the group, filed suit Thursday in Orange County seeking $76 million in damages.
If she wins, she wants the payment to be made in U.S. dollars, not the funny money she helped promote through a so-called network dubbed The United Cities.
She is seeking damages from Angel Cruz, the network's founder and now a federal fugitive over a related conspiracy to defraud Bank of America. Calderon said she is among dozens who are losing their homes and declaring bankruptcy because they bought into Cruz's grand plan.
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There's nothing funny about this money — unless, of course, you're not a member.
Longtime Australian-born Kodiak resident David Cooper, 61, is the organizer and founder of the burgeoning New World Barter Group, a part classifieds, part money-saver, part community-builder exchange group. Members will create transactions of all types in the hopes of saving cash using the newly printed, not-so-funny-money Bart dollar.
After paying a $10 membership fee, members will receive 130 Barts, a subscription to the group newsletter, and access to the online classifieds listing of items and services members are offering. Interested parties make exchanges using a combination of dollars and Barts or even just Barts, hoping to save some George Washingtons in the process. But Cooper said the system can do more once it gets larger.
"This isn't just money. Basically, it's also a service system," Cooper said. "We also want to help develop the cultural and social life in the community … it can bring people together."
Related to neither the San Francisco subway system nor the troublemaking "Simpsons" son is the Bart dollar — equivalent to one U.S. dollar yet worthless to nonmembers. Cooper said it's not an alternative currency and, engineered and freshly cut on the island of Kodiak by Cooper himself, is not backed by any commodity like gold.
Furthermore, it's loaded with at least one security measure: Photocopies of a Bart are overlain by the word "void." In circulation so far is about 800 Barts in five, 10, 20 and 50 denominations, Cooper said.
The New World Barter Group is not a centralized, record-keeping exchange group like a LETS, or Local Exchange Trading System, Cooper said. The only formal records kept are membership, and Cooper said the membership dues go to making the money, and the time and effort toward building a newsletter and updated Web site. Membership dues will increase to $50 next year, though members will receive a referral bonus of Barts if a member convices others to sign up. However, the group's final policies are still in development at this early stage.
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