Milwaukee neighborhoods could print own money

[Raineyrocks]

http://www.chicagotribune.com/business/chi-talk_moneydec03%2C0%2C2902061.story

Milwaukee neighborhoods could print own money
2 neighborhoods consider printing own currency for exclusive use in local stores

By Erika Slife | Tribune reporter
    December 3, 2008

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.

It's not a new concept—experts estimate there are at least 2,000 local currencies all over the world—but it is a practice that tends to burgeon during economic downturns. During the Great Depression, scores of communities relied on their own currencies.

And it's completely legal.

As long as communities don't create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks—and they'd don't even have to be green.

In Wisconsin, could that mean dough that looks like cheese?

eslife@tribune.com

[John Edward Mercier]

Why don't the local retailers just discount their goods?
Since the new currency will be pegged to the US currency... I don't see the benefit.

[David]

Pegging the new paper to the USD is the only way to develop trust with mainstream people.  However, if inflation becomes as ugly as some think it will, they could easily break the peg, because even though it will be 'expensive', it will also hold its value better, depending on their fiscal restraint.