Local Currencies, Who Would Have Thought?
It appears that alternative currencies may be catching on in several parts of the country. Nationally, for example, there is the Liberty Dollar, which is backed by silver as opposed Federal Reserve Notes which are backed by nothing. However an interesting article crossed my eye today about a local currency that seems to be thriving in New England. BerkShares are the local currency of Great Barrington, Massachusetts. The currency is paper based with no coinage for change. The denominations are 1, 5, 10, 20, and 50. A BerkShare is quite pretty as you can see here. Their backs are adorned with full color artworks from artists that reside in Massachusetts, and the fronts are emblazened with the busts of famous Massachusetts residents, such as Norman Rockwell and Herman Melville.
It is backed completely by Federal Reserve Notes, so using it doesn’t seem like a worthwhile endeavor. However, the trick seems to be 1 BerkShare trades for 90 cents, yet is treated like a whole dollar at retailers. Thus a 10% discount of sorts is passed to consumers, and eaten by the local retailers. I don’t know how sustainable this model is, considering a BerkShare’s value is related to the value of the US Dollar. One would speculate that the local economy has probably adjusted its prices to compensate for the inherent “10% discount.” With $759,600 of this currency floating around New England since its inception on Sept. 29, 2006, I’d say it will be there to stay for a while yet.
I’d probably just buy them for the pretty pictures and never spend them. I’m sure they count on that too.
From Reuters: Article Link
Wikipedia: Link
on June 21st, 2007 at 6:31 pm
That probably wouldn’t work in Memphis.