Surviving Without Fiat: Alternative Currencies in Greece
The other week, we wrote about the growing barter economy in Greece. With cash withdrawal limits still in place, Greek citizens are finding it difficult to conduct daily business using traditional methods. Now, the Wall Street Journal reports on the flourishing of a variety of alternative currencies, particularly one named TEM:
TEM—a sophisticated form of barter whose name is the Greek acronym for Local Alternative Unit—was founded in 2010 in the early months of Greece’s debt crisis with less than a dozen members. Now it includes dozens of participating local businesses that use the system to sell goods and services, including prepared food, haircuts, doctor visits, or even for renting an apartment.
“One of the larger and more established alternative payment systems in Greece, TEM has given Greeks living under the strain of wage cuts and tax increases a supplementary way to trade. Instead of dealing with a physical currency, members have an online account that starts at zero when they join. They can opt to take payment for goods and services in TEM, and then use those to buy products from others.”
TEM is a reminder that even when an irresponsible government ruins an economy, humans will find a way to survive. People don’t need government mandates to have a useful, valuable medium of exchange to conduct commerce.
Of course, any Greeks who had some gold and silver saved would have entered this barter system already ahead of the game. Precious metals are the ultimate honest money. An alternative currency backed by precious metals would not only be reliable, it would prevent the government from manipulating the economy in the first place with fiat money.
We wouldn’t be surprised if some of the alternative currency systems the Greeks have developed are being used to acquire physical gold or silver. This would make sense for Greeks heavily dependent on these currencies, since TEM doesn’t allow users to stockpile the barter money. Using TEM to purchase silver would be an efficient way of turning a barter network into a means for saving wealth.
As the WSJ notes, this situation is not unique to Greece. In the aftermath of financial crises throughout the world, barter and alternative currencies spring up spontaneously:
One notable example of alternative currencies used during a crisis was in the 1930s during the Great Depression, when the Austrian town of Wörgl decided to fight the economic downturn by printing its own money. Economists called the result a miracle: Employment boomed, while inflation remained subdued. During the economic depression that struck Argentina in 1998 and lasted till 2002, people formed barter networks and several provinces introduced their own currencies.
“In the wake of the 2008 financial crisis, similar projects have been introduced to Spain, Italy, Portugal, Germany and France.”
The United States will likely join this list when the US dollar eventually collapses, as Peter Schiff has been warning. When that day comes, you’ll wish you had stockpiled some useful barter goods, particularly gold and silver. Gold provides an excellent store of value for large chunks of wealth, while silver’s smaller value-to-weight ratio makes it perfect for in-person transactions. In fact, SchiffGold even offers a Silver Barter Bag of fractional rounds. If you want to learn more about silver, “the people’s money,” download our free special report – The Powerful Case for Silver.
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Peter makes a good case for buying gold & silver. Good article on Greeks going to alternate currencies. What about alternate currencies in US? There is “Berkshares” in Mass. Another (don’t remember the name) in upstate NY (near Cornell Univ). There are numerous others.