- Regional Currency circulates only
within a country or region, unlinkable with the national currency
that is used for banking, finance and international trade.
Regional currency can only keep circulating to pay for goods and
services - it can be banked only for security. It cannot drain out
of the region or country or be trapped in the sink of
millionaires' profits or even interest-bearing private saving.
That means that there need be no paradox of need combined with
unemployment. Jobs that are needed can be paid for, because the
wages will be returning into circulation to pay for local goods
and services, and the income from these that is received in
regional currency will be then passed on again, round and
round.
Separate local currencies for bad times
This is a modern world of paradoxes. One of them is the paradoxical combination of unemployment and too few people doing what needs to be done. In districts where few people have jobs, they also have problems of housing, rubbish, furnishings and shops. In communities with large-scale unemployment, money poured in tends to pour out again.
It would be worth experimenting in one devastated district in America or Britain, to try a co-existing alternative currency that was not legal outside the region or in banking transactions.
It would never connect with national banking but go round and round in its region. It would complement the national currency which still operated in the region too.
It could commence with say $5 in regional currency for every inhabitant 18 or over. Would it increase inflation? Would it run into a sink? Would someone collect it all as ticket-money for a football match (but would then have to use it all in the community)?
In this devastated region, people would not be homeless, because houses would not be boarded up because banks have repossessed them – the mortgages would be frozen for two years. People with homes have more chance for business operations.
Would more people be able to employ more fellow locals in repairs and services and products that would not otherwise be available or that could not compete with imports in normal currency Could those who could not provide services or goods still retain their part of the circulation through the uses local authorities and agencies made of contributions to them paid in part in local currency?
The return of the Irish punt (l June, p4) and examples like Lewes (http://www.thelewespound.org/) give one clue to how business can survive despite global financial instability. A local currency not backed by a national government, and intended to trade only in a small area, serves the true function of money, to enable the exchange of goods and services. LETS schemes also show the way,
The arithmetic of most service industries is difficult – how can the server can be paid without the payer, the served, having higher earnings? How can a service given such as child-rearing be given a value when it is not visible or related to the cost of raw materials?
A comparison can be made with the Grameen system of loans to poor women to start a business, which however involves larger sums than ‘regional currency’.
