Learning about a financial crisis

The constant flux of the world’s financial situation has some groups thinking outside the box.

Representatives from one of those organizations recently visited Marquette to continue the mission of educating the public on how fiscal bubbles form and why they burst.

They believe that larger systems do not work in a period of economic crunch, and therefore cannot be depended on when fast action is needed.

“At a local level, people can organize and do things really quickly,” Nicole Foss from The Automatic Earth said.  “So it’s a lot that can be done, that has been done successfully other places.

“They did the same thing in The Great Depression in the 1930’s in Europe.  Municipalities backed local currencies, then you could pay your local taxes in the local currency as a form of script, like California used in 2008.  It’s sort of a sophisticated IOU system–California was paying its bills with script rather than U.S. dollars for a period in 2008, so that was–at a state level–along these lines.”

The Automatic Earth is one of the Top 10 financial news sites in the world based on their traffic flow.

Shortly after launching in 2008, they predicted the global market meltdown and the ensuing credit crisis.

Foss and her cohorts believe alternative local currency, like streetbanks and timebanks where people trade their goods and services in a more sophisticated bartering system, may be the answer.

“North America will be following the same path as Europe and we can see the leading edge of that, in say, the bankruptcy of Detroit for instance,” Foss said.  “Detroit is imposing ninety percent haircuts on pensions and municipal bond holders because they simply have no capacity to keep the promises they made.”

Marquette was just one of 22 stops on their 6 week, 14 thousand mile tour through the U.S.