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Prior to the formation of the United States, the British colonies that would eventually all become the United States all dealt in their own local currencies. During the Revolutionary War though, the soon-to-be United States introduced a national currency which slowly went on to replace these local currencies. For most countries, this pattern in history occurred, with nationalization creating a single currency. However, today, Germany is going in quite the opposite direction, with the nation having approximately twelve regional currencies, and the potential for this number to increase to sixty.
Why is the country seeing a resurgence of local currencies? Many people account for a general fear of globalization for these regional currencies. By making a local currency, these regions are ensuring that the money will stay in the region and can only be spent there. In a way, it is the most extreme version of supporting national businesses - by making it impossible to support global businesses.
Another feature of the local currency is that it decreases in value over time. Every quarter, the regional currency loses some fraction of its value. This loss in value causes people to spend the money quicker, promoting consumption, which has been a big issue in the frugal German society. What's more, this loss in value actually has some side benefits too. In order to keep the currency's full value, the person holding it can pay a fee to get the currency stamped and have its value redeemed. This fee then goes to support non-profit organizations in the region, including after school programs.
One comment heard by people who hear about this program is that it won't last. They see it as a radical response to the current recession. However, these currencies have lasted, as they were introduced eight years ago.
In the end, it will be interesting to see the long term effects of these local currencies. What we do know, is that as the world is going more and more global, more people are starting to think local.
About this Author
Martin Fister is an active product blogger, writing for web sites including american eagle shirts [http://www.americaneagleshirts.net] and rainbow flip flops [http://www.rainbowflipflops.org]. In his spare time, Martin also pursues his interests in the music industry as a journalist.
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