Money from nothing: supplying money should be a public service

Local currencies and local banks

Local currency development is also an important aspect of reform and can make a significant contribution to economic decentralisation. It will involve the spread of community currencies like Time Dollars, Ithaca Hours, LETSystems, Chiemgauers, and others already existing in many countries. These currencies can help to support new institutions like local banks, credit unions, and investment funds, as a basis for greater local economic self-reliance.

Local currencies can provide people with a partial response to immediate crises like the present one. They could be encouraged to expand greatly after mainstream monetary reform, when the national money supply will be created as a public service under democratic supervision. But, in the absence of monetary reform, just as they did after the 1930s Great Depression, private banks will do everything possible to prevent the expansion of locally controlled currencies and finance, in order to maintain their profits. As a result, most people will probably remain too dependent on earnings, pensions, benefits, etc., all denominated in a national currency, to commit themselves to decentralised alternative currencies instead.

A nightmare for the new President

As President Obama struggles with the biggest economic crisis in decades, he may be aware of history. Not only Jefferson, Madison, and Lincoln opposed giving "the money power" to the banks. Woodrow Wilson regretted having "unwittingly ruined my country" by signing the 1913 Federal Reserve Act.

As the cost of reviving the banks' ownership of our money supply becomes clearer in the coming months, the president may wonder if he should avoid Woodrow Wilson's regret and take the historic opportunity offered by this crisis to restore the money power to the people.