Yesterday Paul’s dad and I were talking about the famous quote by Baron Nathan Mayer Rothschild (1777-1836), the London financier and one of the founders of the international Rothschild banking dynasty which is now worth over $100 trillion and is one of the six families that owns the U.S. Federal Reserve Bank: “I care not what puppet is placed on the throne of England to rule the Empire…The man that controls Britain’s money supply controls the British Empire. And I control the money supply.”
“It may sound overly simplistic,” I said, “but the only way we can regain our freedom is to stop using their fiat currency.”
“You mean Federal Reserve notes,” Mike said. “But how would that be possible?”
A trend which is emerging in the US and various other countries is the appearance of alternative monetary systems. Just as during the American Civil War, the Great Depression, and other times of severe financial crises, states and communities are beginning to print their own money. There are “greens” issued by the Lettuce Patch Bank at the Dancing Rabbit Ecovillage in rural Northeastern Missouri. Residents from the Milwaukee neighborhoods of Riverwest and East Side are considering printing their own money. Even the state of California is so broke it has been making some of its payments in IOUs.
In Western Massachusetts one finds BerkShares, which are convertible to U.S. dollars. Susan Witt, Executive Director of the E.F. Schumacher Society (the nonprofit behind the currency) was quoted last year by Time.com as saying that more than $2 million in BerkShares have been issued through the 12 branches of five local banks.
During the 1991 recession, “Ithaca Hours” were issued to sustain Ithaca, New York’s local economy and stem the loss of jobs. “Hours” circulated within the community, moving from local shop to local artisan and back, rather than leaking out into the wider monetary system. They kept people from literally going hungry. The slogan on the Hour read: “In Ithaca We Trust.”
Alternative currencies are generally used in conjunction with conventional money, as in using local currency at the farmer’s market and regular greenbacks at the supermarket. For this reason, their use is sometimes called a “Dual Currency System.” “It doesn’t try in any way to replace cash,” says Christoph Hensch, a Swiss national and former banker now living in Christchurch, New Zealand. Rather, it offers a way “for people to share and redeem value they have in the community.”
Hensch says alternative currencies are most useful in geographical areas or social sectors where money doesn’t flow sufficiently, citing for example New Zealand’s Golden Bay, which is so remote that it sometimes nearly functions as its own economy—the same phenomenon Paul and I are seeing here where barter is commonplace.
Homegrown currency doesn’t merely fortify the local economy, it builds community. According to Susan Witt, the use of BerkShares, for example, has helped to solidify local ties. “It’s cash, so you have to pay your bills by walking into the store or dentist’s office,” she says.
People out here similarly recognize they’ve got a stake in their neighbor’s well-being because our neighbor embody both market and supply chain. One can feel more secure doing business out here because knowing the person you’re dealing with (and his family and friends) provides a kind of social collateral.
Several years ago in Minneapolis, I helped my longtime friend Kevin Ryan research a dual currency service he was developing which involved the use of a debit-type card that is swiped by local merchants. Customers received a cash rebate from merchants in their accounts, local churches and nonprofits which enrolled the customers received a portion of the rebate, and the local economy was strengthened.
Characteristically, Kevin was years ahead of his time in developing this computer-mediated system to keep track of such transactions, and the successor company to his venture is now well positioned to make a lot of money by providing a much needed service for the hard times to come.
You can read so many dire predictions about the current crisis which, like a log rolling downhill, is unstoppable. Some experts are saying it will be worse than the Great Depression. I have heard more than one prediction that we will experience hyperinflation as severe as Germany’s in the 1920s or Argentina’s in 2000. It would be so easy to despair and begin thinking all is hopeless. Take heart and stock up on food, cash, and other things you will need to survive the inevitable shortages and hyperinflation.
I believe the recession, regardless of how long or severe it turns out to be, can be the re-making of America into something very positive. There is opportunity in even the direst circumstances, if only you look for it and are ready. History shows we are an innovative and resilient people, and the emergence of the alternative currency trend is a leading indicator of American resourcefulness.
Even after the darkest night, the sun always rises the next morning and will do so for eons to come.