Struggling towns printing their own cash

MSNMoney.com ^ | 2/15/10

[Kartographer]

In an echo of the Great Depression, local currencies with their own special flavors are popping up all over in attempts to give commerce and communities a lift.

[Kartographer]

Now that's a financial plan I could easily implement; start printing my own money!

[TexGuy]

Gresham's law: "Bad money drives out good" (or the inverse) applies here somewhere ...

[Red in Blue PA]

People need to make sure they have a wheelbarrow handy.....for those future purchases of bread loaves.

[screaminsunshine]

The way it is going now I would not be surprised if the Fed ends up letting us download bills so we can print our own.

[Red in Blue PA]

Wonder if we can buy them with carbon credits?

[screaminsunshine]

Camel Cig Cupons? Actually food cupons have more cash value tha CC’s.

[Kartographer]

Hey buddy can you spare a million of Kalifornia Kash so I can buy a loaf of bread for my family?

[Rokurota]

[Kartographer]

What happens when the paper and ink are worth more than the cash??

[padre35]

That plan will work for those towns...until they discover they can print more and more of their money...

[Oatka]

Happy days are here again!

[SatinDoll]

This is patently unConstitutional per Article I, Section 10. Only the Federal Government is allowed to issue currency.

U.S.Constitution, Article I, Section 10: “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque or Reprisal; coin Money;...”

[SatinDoll]

I forgot to add:

“...;emit Bills of Credit;...”

[Freedom4US]

The state isn’t issuing currency or minting coins, private firms are — guess that’s OK.

[SatinDoll]

Sounds like hair-splitting to me. I still believe it is illegal.

Swapping, or trading is discouraged by State and Federal Governments because it is near impossible to tax. Nevertheless, I suspect that would garner less attention from the Treasury Dept. than ‘printing money’. The last thing any person, business, state or local government wants is Treasury agents tearing their premises apart.

[Oatka]

{cities/states issuing scrip during the 1929 Depression]

This is patently unConstitutional per Article I, Section 10. Only the Federal Government is allowed to issue currency.

Indeed, but in those hard times there was a lot of wink-wink, nudge-nudge going on as people tried to survive. One survivor said that in the late '30s a local company was issuing scrip/IOUs "to be redeemed later" as wages and people were so desperate for jobs they were accepting it. When things got better, the company declared bankruptcy, then reopened under a new name. The scrip holders got screwed, as the Old Timer warned those people at the time.

[familyop]

"People need to make sure they have a wheelbarrow handy.....for those future purchases of bread loaves."

I lived in Denver for a while during the '90s before getting away from cities. Most people there wouldn't touch cold cuts (lunch meats) and didn't even want such cheap food in their presence. When feeling like inconveniencing themselves, they ordered pizzas, hamburgers, and the like. ...turned out that most of the people on the Range were the same way. Colorado had more jobs for decades than it knew what to do with.

Yeah, the big default to come is going to be rough for most people but a blessing for some.

[RipSawyer]

What happens when the paper and ink are worth more than the cash??
////////////////////////////////////////////////////////////

In reality it has already been that way since the Nixon administration, we just haven’t admitted it.

[SunkenCiv]

Thanks Kartographer.

[Freedom4US]

Oh, from a purely financial perspective I think this is a bad deal, because they are essentially floating a non-redeemable currency in exchange for a redeemable one.

I mean, duh.

What I am saying, the government says states won’t issue anything but gold or silver as money. Doesn’t apply to non-state entities, then. (Not saying I like that arrangmement either, just that it appears this is the law)