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The Case For Complementary Currencies
By Martina van Dongen
Over the past few years we've seen that many local currencies have come into existence.
Let's first take a look at what a local currency is, and then follow the story why they mushroom now.
A local currency or a complementary currency is used as a medium of exchange among participating of a local group. The members of the group share the same economic interest: they wish to broaden the economic basis of the region they live in, and they wish to broaden the basis of the businesses they run. Local currencies may come in the shape of coins and notes just like the ones issued by the Central Bank, or they may be completely virtual, like credit and debit entries of a barter exchange. Also, they may be digital, like for instance digital currencies, backed by precious metals.
The common feature of all the local interest groups is to find ways and means to overcome the flaws of the monetary system in existence.
In the current monetary system there are two flaws.
First of all, the current monetary system allows private individuals or private companies to charge interest on loans to others.
Today there are huge inconsistencies in the value of global production, debt and assets.
In an environment of tougher competition prices drop. With falling prices risks are on the rise that borrowers will default on loan repayment.
Another feature of the current monetary system is the fact that it is not cash flow safe. The bearer of an amount of cash may prefer to hoard his cash. There is even a premium on this strategy: any local bank will pay interest on deposits of money. However, there is no guarantee that the bank will grant loans to the local community.
Local (regional) currencies are not in use as a substitute for legal tender. Hence the name complementary currency. Complementary currencies are used anywhere where a group (local, regional, or special economic interest) finds that adverse economic trends need to be responded to.
The focus of groups that adopt a business strategy to use a form of complementary currency is to broaden its economic basis. The local economy will grow because it is active, open, and diversified. Sustainable economic growth is not expected to come from a rapid sale of assets, like local resources.
Benefits
The introduction of a complementary currency is successful if participants of the system have at least one product or service to offer to the community using that currency.
From the point of view of each individual participant in the currency system, the system provides a marketing tool at virtually no cost.
Ever since the end of the experiment in the Austrian township of Woergl in 1934, chances are slim to none that the monetary system in existence (a National Bank that is responsible for the issue of money; private individuals and companies are allowed to charge interest on loans to others) will ever be replaced by a system that handles these issues in a different way.
For this reason, complementary currencies that perform a function of deferred payment in one way or another have the best chances in the marketplace.
Best choice
Entrepreneurs have a wide variety of complementary currencies at their disposal.
Your best options are with the ones that provide easy access. So many people are expected to join; this feature makes a complementary currency a real marketing tool.
Your choice should also be for the ones that are closely linked to the existing monetary system. People who go with the tide succeed in the marketplace. People who go against the tide don't.
Deferred payment poses a risk to the party that accepts this form of payment.
Parties who take risks obviously deserve to be rewarded. Complementary currencies in the shape of credit and debit entries in the books of a barter exchange have a role to play here.
In a barter exchange participants may be eligible to a line of non-cash "credit" against collateral. The credit is granted in form of purchasing power with other participants to buy goods and services. Accounts are settled with the line of credit. The participant has the option to repay the line of credit by selling products and/or services for complementary currency within the group of participants, or to settle the account with cash within the time frame agreed upon. This option makes the system sustainable, and it protects the participants against the risk of default of one of their peers.
The combination of the features: easy access and numerous participants, and linkage to the current monetary system as a form of deferred payment make for a solid, sustainable system.
One of the opportunities today (November 2006) is http://threepointeightmillioncash.blogspot.com.
Especially if you are a small business owner, you should plan ahead and develop a strategy to stand out from other small business owners. The use of one or more complementary currencies and the organizations that stand behind them provides a low cost and time efficient means to put your product on the market, before somebody else does.
To take things a step further, you will stand out in a positive way by packaging seemingly unrelated business transactions, making use of offers of surplus production of various goods, standard currencies, and complementary currencies. The latter may be freely replaced by: the services of a barter exchange.
You will stand a better chance starting your small business following this strategy than focusing on selling your product for cash, which is always in short supply.
Along with this strategy, as Frits Visscher points out in his brochure "How to be a successful corporate consultant", there are tons of opportunities for small start up businesses and for consultants, business promoters, middlemen, intermediaries, finders, business developers and commercial agents. In your home town there are people who plan to start a business, who have started a business, who are buying an existing business, who are selling a business. All are looking out for cash that is in short supply. You can earn substantial fees if you make use of one or more complementary currencies. Incidentally, Frits Visscher's brochure is for sale by referral only.
Resources:
Finder's Fees; Special Report by J.F. Straw
http://www.barternews.com
http://www.complementarycurrency.org
About the Author
Martina van Dongen is an independent business researcher and internet entrepreneur
Article Source: http://www.simplysearch4it.com/article/44677.html
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