This Section Reports On All The News And Happenings Within The Trade Exchange Industry

Please note: Following this introduction are dozens of excellent articles for you. And we add to them on a regular basis.

Trade exchanges, initially known as barter clubs when the concept was introduced 42 years ago, now number over 500 nationally.

Although independently operated, their collective client base forms a "business-to-business" network comprised of an estimated 450,000 companies (retailers, services, and manufacturers).

When trading through a trade exchange members have the opportunity to make multi-lateral trades…rather than one-on-one trades. Which means many greater options are available to you.

That's because when you make a trade with another party within the exchange you do not take their product as a payment, but rather you receive trade dollars.

Those trade dollars are deposited by the exchange into your account, and are then available for spending within the exchange. As a member you can spend your trade dollars with others within the exchange whenever you wish to buy their products or services.

The trade dollar is equivalent to one cash dollar for use of accounting purposes. Sales are normally made at full retail with a 10% to 15% cash commission paid to the exchange for its services.

Under the Tax & Equity Fiscal Responsibility Act of 1982 (TEFRA Act) trade exchanges are classified as third-party record keepers, having the same fiduciary obligations as bankers and stock (securities) brokers. For tax purposes trade dollars are taxable in the year they are "earned" and reported as such on 1099-B forms to the IRS.

First Annual IRTA Video Awards Announced

IMS Holds Annual Shareholder Meeting

Wallach Offers Definition Of Barter Industry

Bartercard New Service Moves Toward Total Business Solution

IMS Barter Unveils New Trading Platform

ITEX Posts 19% Revenue Increase For Third Quarter 2008

Sino Fibre & Union EPS Sign Agreement Providing Online Barter Processing Services In China

The Definition Of An “A” Customer...Cash Or Barter

IRTA’s Euro Chapter Marks 10th Year Anniversary

ITEX Becomes Sponsor Of NYC Entrepreneurs’ Organizatio

IMS Unveils Proprietary Barter Commerce Management Software

Barter Is Not An IRS Target!

Barter Is Good Business

IMS Schedules Annual Shareholder Meeting

Former Barter-Pro Sondra Ames Teams With Daughter Allison To Create National Footprint For Their Wonderland Bakery

IMS Posts First Quarter Expansion Results

The Key To Profits During A Recession Is Preparation

What Your Accountant Should Know About The Business Of Barter

ITEX 26th Annual Convention Hits Vegas In High Gea

IRTA Europe Meeting Deemed Great Success

Barter Company Tradia Goes Green & Sponsors Green Earth Expo

BBX Barter Trading Commences In China

Green Apple Barter Targets $2 Million In Itex Transactions

International Monetary Systems Receives Equity Investment

TTi Announces Ever-Increasing Online Barter Activity

Solution Selling Key To Barter Industry’s Expansion 

IMS Reports Record Year Of Achievement & Growth

New Merger Forms Trade Limited

ITEX’s White Responds to Western Sizzlin’s Unsolicited Tender Offer Changes

Humphreys Proudly Announces New Tradia Web Site

White Compares Barter Industry To Credit Card Industry

Western Sizzlin Discloses ITEX Offer Amendment

TeleTrade int’l Announces Nearly $11 Million In Trade Activity

ITEX Announces Results For Second Quarter 2008

Paradigm Shift For International Reciprocal Trade Association

ITEX Enters “Software As A Service” Market

IMS Enrolls Record Number Of New Clients In January

Wallach Gets Nod For IRTA Hall-Of-Fame Award

Hall Of Fame Acceptance Speech

Barter Industry Faces Tremendous Challenges

IMS Gobbles Up Nation’s Largest Independent Trade Exchange...Schacht & Varner’s NTA/ITA

Jack Schacht, Joan Varner Were Heroes To Nascent Barter Industry

2006 IRTA Awards Banquet Presentation

Commercial Barter Industry Looks To Emulate Visa Card Model

Trade Exchange Contingent Enjoys Annual Convention In Toronto

International Monetary Systems Second Quarter Earnings

Australia’s BBX Move Into Wine Propitious

eBay Seller Teams Up With Bartercard

XO Limited Sells Thailand/Vietnam Ozone Franchise License

Karen Hoffman Expresses Thanks For Industry Experience

TeleTrade International Transactions Up 19%

IRTA Announces Keynote Speaker

Barter Clubs

Bartercard Stages World’s Largest Trade Show $4 Million Traded In 7 Hours

IMS Barter Creates Broker Division For Entrepreneurs

ITEX Selects New Orleans For National Convention

Bartercard Expands UK Growth With Move Into Ireland

Bartercard’s Man In New Zealand, CFO Michael Parsons, Doing Bang-Up Job

BBX Expands Into Another Major Field—Wine

IMS Announces April Revenue Increase

ITEX Has Explosive Quarter...Both Its Income And Revenue

TeleTrade International Announces 23% Trade Volume Growth

Travel And Entertainment Expenses Can Be Tricky!

The Motley Fool Newsletter Looks At Barter

ITEX Completes Largest Convention Ever

Florida Barter’s Bingman Crowned Broker Of The Year

IMS Revenues Up 53%, Operating Profits Advance 144%

IRTA Announces New Verifiable Logo Program

Mardak Enthused With Hedge Fund Equity Investment

News From Universal Currency

Exciting Trip Of A Lifetime Accomplished Through Barter

TeleTrade International Hits New Benchmark

Flis Heads National Trade Banc

Steve Singer Leaves Barter Industry, Buys Budpak, Inc.

Persistence Paying Off For Mardak

“IRTA U” Theme For 27th Annual International Conference In September

Schacht’s ITA Goes Remote To Boost Productivity & Sales

IMS Files Annual Report, Acquires More Equity Capital

TeleTrade’s First Quarter Trading Volume Up 24%!

Vail, Aspen, Steamboat Springs! IMS Expands Again, Acquiring Trade Exchange of the Rockies

Barter Happenings Here & There

ITEX Reports Transactions, Income, Repurchase Of Shares

Largest Independent Trade Exchange In America Introduces Trademart—An Online Barter Shopping Mall

Munson Gets Ink With $150,000 Barter Deal

IMS Activities Taking Place On Many Fronts

BBX Forms Real Estate Fund For Property Acquisitions

Bartercard Happenings

IRTA Conference Held In Amsterdam

Karen Welch Names Her Biggest Competitor

BBX Acquires Rival Tradebart Australia

TeleTrade Announces Large Trading Volume Increase

ITEX Continues Posting Strong Figures

IMS Eyes 200+ Monthly Enrollments

$2 Million BBX Trade Dollars Used To Purchase $8.3 Million Resort

BNI Acquires Credible Competitor—American Barter Network

Bartercard’s Global Expansion Continues With Frankfurt Stock Exchange Listing

Other Barter Company Happenings Globally

“We have secured the funding necessary to continue our industry roll-up program on attractive terms.”

ITEX Convention In Las Vegas Could Be Industry’s Largest

Bartering Gaining Popularity as U.S. Economy Sputters - PDF

Beating The Downturn With Barter Exchanges - PDF

Program Developer Steve Webster Teaching Certified Trade Broker (CTB) Seminars

Ralf Becker Addressing IRTA Europe Conference

Bartercard Sells Turkey License For $600,000

Record Growth Reported By International Monetary Systems

National Association of Trade Exchanges Reports Banc Trading Totals

eValues Expands Online Technology Services

Trade Exchange Industry First...Automobile Fuel On Barter!

Ron Whitney’s Unstinting Efforts On Behalf Of U.S. Commercial Barter Industry

IRTA 2006 International Conference Slated For Florida

BizXchange Lauded By Bay Area Barterers

Suplizio Addresses Biggest Challenge Facing Barter Industry

Illinois Trade Association Offering New Online Barter Shopping Service To Membership

Zampatti Promoting Entire Concert On Barter

US Bank Extends ITEX Line-Of-Credit To $1 Million

Matchbin Barter Platform Providing Easy Entry Into $17 Billion Print Classified Market, Plus eBay & Yahoo

Bartercard Processes More Transactions Than American Express & Diners Club Combined

IMS Reports Another $6 Million Trade Volume Month

International Reciprocal Trade Association Introduces New Membership Category & Brand Verification Program

RTE Revs Barter Sales With High End Automotive Marketing

Angel Investors Pull Back From Betting On Start-Up Businesses

New Universal “Alternative Currency” Backed By Major Corp.’s

BarterNews Played Major Role In Olympic Trade With Fortune 100 Corporation

Statistics Reinforce Enormous Potential For Commercial Barter Industry

BizXchange Earns Certified Trade Exchange Designation By IRTA

Australia's BBX Goes Public With Oversubscribed IPO

When In Doubt Call Your Broker Like This Happy Entrepreneur Did

IRTA Designates Bartercard First Official Certified Trade Exchange

BBX Investors Into Real Estate

Electronic Barter Network Will Fuel World Economy

Two Reasons For Focusing On Your Barter Efforts

Ingenious Barter Arrangement Cements Strategic Tie

Changes Ahead For Barter Industry As High Tech Marries High Touch

Another Cashless Currency Program Introduced

"Direct Connect" Model Another Area of Concern For Barter Industry

Cooper Suggests Paradigm Shift - PDF Format

Success Attitude = (Core Desires + Direction) x Proper Action + Persistence

Barterers. . . Use Win-Win Negotiations In All Your Trades!

A Look Back - Susan Groenwald - PDF Format

International Monetary Systems Aspires To Reach The Mountain Top - PDF Format

California Vintner Who Embraced Barter

Focus On Excellence - Alliance Barter - PDF Format

How The World's Largest Supplier Of Investment Advisory Services Uses Barter

Focus On Excellence - A Conversation with Tradecorp's Art Goehring - PDF Format

A Client's View of Barter

European Attendance Most Impressive At IRTA Barter Congress - PDF Format
(requires Adobe Acrobat Reader. Click here to download Adobe Acrobat Reader if you don't have it installed.)

Industry's Relentless March Forward Continues In Denver

How A Start-up Microbrewery Used Barter

No Transaction Fees At Ubarter.com

Move Into 2001 With Barter In Your Planning Efforts

Industry Icons Come Together To Form BarterNet World's Largest Barter Company

NFL Football Hall-of-Famer. Fran Tarkenton Says....

Use Some of Your Trade Dollars To Assist Your Most Valued Customers

Your Customers Can Often Be Your Best Advisors!

New Tax Law Guarantees More Barter (Stock Transactions)

Four Simple Steps Toward Developing Successful Reciprocal Purchases

Use Barter (Trade Dollars) To Reward and Motivate Employees

Your Company's Team Of Professional Advisors Should Include A Barter Expert

Renovation Exchanged For Exclusivity & Advertising

When In Doubt Call Your Broker Like This Happy Entrepreneur Does

What's Your Barter I.Q.? (Imagination Quotient)

Your Trade Exchange Membership Is An Important, Appreciating Business Asset!

Three Reasons Why Your Trade Exchange Membership Is So Valuable!

Knowing The Critical Function Of Your Business Puts You On The Road To Success

Focus Your Marketing Efforts, Cash & Trade, Where They Will Do The Most Good

Trace Exchange Perfect Environment For "Friendship Marketing"

All Barter Deposits Are Not Taxable Income

10 Ways Barter Can Play An Important Role In The Building Of Your Assets

THE ORIGINAL MEANING OF TRADE MEETS THE FUTURE IN BARTER

Simple One-to-One Exchanges Will Give Way to Organized, Computerized, Multi-Lateral Barter

The following article was written for World Trade magazine by BarterNews editor Bob Meyer.

In late August the world's economic leaders met for an annual policy conference in Jackson Hole, Wyoming. Alan Greenspan was there, as were the heads of the central banks of Britain, Japan, and 26 other countries.

One of the attendees, Mervyn King, Deputy Governor of the Bank of England, ruminated on the impact of electronic commerce and the future of money. His conclusion, quoted below, will be startling to some, yet obvious to others--particularly those engaged in the commercial barter industry, which I've been covering for 20 years.

"There is no reason products and services could not be swapped directly by consumers and producers through a system of direct exchange--essentially a massive barter economy.

"All it requires is some commonly used unit of account (trade dollars) and adequate computing power to make sure all transactions could be settled immediately.

"People would pay each other electronically, without the payment being routed through anything that we would currently recognize as a bank. Central banks in their present form would no longer exist--nor would money."

International business growth coupled with today's blistering technological change, means it's only a question of time before electronic commerce impacts the role of money, inasmuch as companies of every size look for easier, more efficient ways to facilitate their business efforts.

Mr. King's suggestion of electronic barter payments would make international business considerably easier for many, as it would negate today's struggle to acquire sufficient U.S. currency--which is still the unit of exchange in the majority of international transactions. Barter is used because foreign trading partners don't have, or don't want to use, their limited hard currency to buy products and services from the sellers.

Unfortunately, today's international mode of bilateral one-to-one barter is very tedious and restrictive. The foreign entity uses the U.S. company to, in effect, become their defacto marketing arm. Additionally, growing nationalism often requires an "offset" component be added to the transaction. The buyer's country dictating, "If we give you this (sale) business opportunity, you will be expected (or required) to bring back business to our country--a percentage of the deal's total value." This could be in the form of pushing tourism toward them, building a factory in their country, or agreeing to make selected purchases for other products and services from the country.

Various countertrade mechanism's will evolve as the magnitude of world trade expands. (The World Trade Organization, the U.S. Dept. of Commerce, and The Economist magazine say it accounts for 8% to 10% of the $5 trillion business now done between the countries of the world.) One of the changes will be the introduction of a direct exchange utilizing a unit of account as envisioned by Mr. King. The use of a "trade dollar" as a form of payment offers multi-lateral trading possibilities. Interestingly, it's an alternative already being used by hundreds of thousands of small business owners. And its use is growing, percentage-wise, faster than countertrade.

Computer + Trade Dollars = Multi-Lateral Trading

Whereas countertrade has always been used by Corporate America, this new form of barter evolved from the small business sector. Known as a trade exchange, it's a proven, effective way to conduct business without the use of cash. Now used worldwide by some 600,000 companies aggregately, it has recently taken on an international bent by increasing its availability from three countries ten years ago to a present 23 countries. This method of trading is more sophisticated and versatile than today's countertrade methods, because it's multi-lateral rather than countertrade's bilateralism. In short, why would one take canned hams as a countertrade payment, which entails remarketing, if one can instead acquire a unit of account (a trade dollar) which can be spent in a variety of ways for needed products and services? A trade dollar is easier, faster, and less expensive to use.

How A Trade Exchange Works

In 1960, "Mac" McConnell, then a 38-year-old unsatisfied president and principal stockholder of a Los Angeles thrift and loan, devised and developed a debit and credit system for barter which enabled traders to circumvent the cumbersome one-on-one trading.

McConnell, who studied accounting at Washington University and later earned a master's degree in econometrics--the statistical application of economics--at the University of Chicago, not only developed a professional accounting system for barter, but more importantly created a credit system that gave it liquidity.

The company he started, Business Exchange (known in the industry as BX), is one of the largest exchanges in the U.S. with 20,000 members. Shortly after his successful endeavor others followed, all emulating the McConnell model. There are now over 700 trade exchanges worldwide, with 450 of them located in the United States.

A trade exchange is a privately-owned company that provides its members a conduit to other like-minded members, who sell and buy from each other using a trade dollar as a medium of exchange (equivalent to one cash dollar for use of accounting purposes).

Each time a member makes a trade purchase, the exchange debits the buyer's account and credits the seller's account with trade dollars. Sales are normally made at the seller's normal pricing structure, whether retailer, wholesaler or liquidator. A cash commission of typically 10% is paid to the exchange for its services.

Under the Tax Equity & Fiscal Responsibility Act of 1982 (TEFRA) trade exchanges are classified as third-party record-keepers, having the same fiduciary obligations as bankers and stock (securities) brokers. For tax purposes trade dollars are taxable in the year they are earned, and reported as such on 1099-B forms to the IRS. All members of an exchange get a 1099-B showing their barter sales for the calendar year.

Industry Associations Established

In 1979, the first of two national trade associations was formed. Known as the International Reciprocal Trade Association (IRTA), its goal in those early days was to bring together trade exchanges to foster the common interests of a fledgling commercial barter industry.

Today IRTA members (barter companies) come from as far away as Russia, Iceland, Germany, Chile, Turkey, and Australia. A second association, the Cleveland-based National Association of Trade Exchanges (NATE) came into existence in 1984 and focuses on a domestic agenda for its membership.

Universal Currency Established Promoting Global Barter Business

It wasn't long after the first IRTA organizational meeting in California twenty years ago that trade exchange owners, newly introduced to one another, began trading among themselves so they could expand the goods and services offered to their respective networks--thereby helping their clients.

They did so on a reciprocal basis, owner-to-owner, inasmuch as their trade dollar currencies were inconvertible. However, given the inherent risks in providing extensive credit to one another, the potential for trade between trade exchanges was limited until a way of lessening the liability was created.

That occurred in 1996 when a proposal was made by IRTA's chief executive to establish and operate a Universal Currency Clearinghouse (UC). Instead of trading hard product between each other, a currency just for this purpose would be established. IRTA would administer and control the currency.

The idea was overwhelmingly approved by the Board of Directors, and the opportunity was immediately at hand to develop a worldwide system which would enable trade exchange owners, regardless of their size or location, to easily trade with one another by using this special currency. Transactions are processed by an automated 24-hour authorization center or via e-mail, with UC monthly trading volume currently at $1 million.

Dot.com Companies Enter Barter Arena

Within the last year barter on the internet has appeared and promises to take the industry to the next level, as the bartering opportunitiess for various products and services become increasingly global using this new medium.

Ubarter.com in Seattle and Melbourne-based BarterExpress.com are expanding rapidly. On the horizon are two other venture-capital backed internet barter companies, which are in the pre-launch stage. Their backing reportedly comes from Kleiner Perkins Caufield & Byers, and Sanford Robertson, as well as Vector Capital.

Recently a new market-making service, TradeBanc.com, has been introduced by one of the industry's successful practitioners. Its computerized technology will enable members of trade exchanges to trade directly, online, with members of other trade exchanges--anywhere in the world--as long as their barter company is a TradeBanc affiliate.

Every barter company will continue to have their own front-end, operating as they do now. That's because TradeBanc (being the market-maker) is the facilitator or clearinghouse, rather than a third-party record keeper.

The new technology will be a valuable adjunct to the commercial barter industry. It promises to catapult international trading efforts forward since the aggregation of all goods and services from all the participating TradeBanc affiliates will be housed in a single database. The tranactions will be cleared by the local exchanges, and settlement will be made using IRTA's Universal Currency.

How Your Company Can Benefit

Trade exchanges and corporate barter companies facilitate the movement of $10 billion in goods and services annually. Now done almost entirely in their respective domestic markets, as the Universal Currency is still in its infancy.

That is changing, however, as members of trade exchanges are finding that trips abroad can be handled through their trade exchanges. I personally know scores of business owners who have taken extensive business trips to Europe and Asia, covering the expenses with trade dollars. Additionally, media around the world is increasingly available for companies who have international needs.

For further information on barter companies that are members of IRTA and use the Universal Currency, contact IRTA at (312) 461-0236, or their web site:www.irta.com.

Conclusion Mr. King's vision of the future implementation of direct exchanging--becoming an immense barter economy--is plausible, because all the ingredients necessary for attainment are now at hand with today's enormous and ever-growing computer power. The use of trade dollars, as a viable currency or a medium-of-exchange, is four decades old and utilized in millions of transactions.

The ubiquitousness of the internet and its infrastructure should/could enable the development of a massive online electronic barter economy, to complement and expand the off-line barter offices now dotted around the globe. Which leaves only one final part of the puzzle to be found--capitalization.

Basically, this will require that one or more major corporations grasp in totality the enormous magnitude of creating and ultimately implementing a private, worldwide barter currency.

The move in this direction is, admittedly, very fragmented at this time. But the commercial barter industry's evolution is on-going and will continue. Dot.com companies entering the barter arena will speed the movement forward. The question at this time is: How big will the electronic barter economy ultimately become?

Given the projections for U.S. business-to-business e-commerce (defined as orders placed between businesses via the internet) which is expected to explode over the next few years reaching $1.3 trillion in 2003, it is not that far a reach to assume that with financial might and manpower, the creation of an efficient, effective mechanism for commerce could be constructed which would allow for the payment and acquisition of goods and services by utilizing one's own products and services.

About the author: Bob Meyer, a former major league baseball player, is the founder and publisher of BarterNews magazine, established in 1979. In 1997 he was the third inductee into the IRTA "Barter Hall of Fame." He can be reached at www.barternews.com.  

BE YOUR OWN BANK [Alternative Currencies]

Article by Daniel Evans, XO Limited

Inflation proof and interest free money! Interest free loans available to anyone! The end of poverty! Sounds like a pipe-dream doesn’t it? The truth is that the mechanism by which this can be achieved is as old as time and already operates on a small-scale in many places throughout the world.

In order to examine how this is possible we must first understand what money is and where it comes from. 

Money is anything accepted as payment for goods and services by most people in an area at a given time. It is simply a token, a promise that the item of exchange is able to be redeemed for goods and services and, therefore, money can theoretically be anything that people desire to own, not for its direct use, but rather for its value in trading for things that are useful. Until recently the world-wide preference for money has been gold.

There are essentially only three types of money:

-         Commodity (also known as Resource or Representative) Money
-         Fiat (or Credit) Money
-         Barter

Commodity Backed Currency is money that can be redeemed for gold, silver, or something with a recognized “intrinsic value”. This form of money is effectively an IOU which can be remitted at any time for the product which it represents. It is also very savable as it is virtually impossible to counterfeit (try passing off a fake cow to someone and see if you can make it out of town before the recipient realizes their mistake). In the United States the dollar was defined by the Coinage Act of 1792 as 325.25 grains of silver. This differs from the current US Dollar which now is a fiat currency.

Another benefit of commodity backed money is that it does not deteriorate in value however it also has several intrinsic problems. One such problem is that the unit of measure (such as gold) may be limited by the cost of producing it and/or its scarcity.

This also represents a catch-22 situation. No one will issue a currency backed by something that is readily available to everyone, yet there needs to be enough of the backing-unit accessible to anticipate growth in the local economy (caused by consumer desire and/or population increase).

We are currently seeing a resurgence of commodity backed currencies with the rise of online services such as e-gold (which claims that they will convert your cash deposits into a virtual currency which it backs by gold held in vaults). The downside to these currencies is that any such company having operating costs in excess of revenue may be tempted to borrow against the gold in its reserve. Such a problem may only be realized if there is a “run” on the currency, caused by a lack of belief in the system. The majority of the participants wanting to withdraw their gold will reveal any deficit in the system.

In contrast to commodity backed money, Fiat Currency is not representative of any fixed assets or the promise of redemption in some other form. The acceptance of this money is therefore solely dependant on the recipients ‘belief’ that others will also accept and honor the money.

In 1971 President Nixon unilaterally resigned from the Bretton Woods Accord. At the heart of the agreement was the guarantee that the US would redeem one ounce of gold for every $35 held by foreign governments. The agreement collapsed because foreign holders of dollars started demanding gold but there were too many dollars in circulation to honor the redemption guarantee. This brought about the rise of fiat currency in the United States, a move which was quickly followed by other countries.

The built in flaw is that fiat currencies always keep the total sum of all debt well ahead of the money available to repay it.

An example of this is a bank printing and lending out $1000. It then asks the borrower to return the initial $1000 plus interest of $100 in a year’s time – that is 10% interest. The only way in which the borrower can return 1100 of the banks notes is if the bank prints, and lends, $100 more – for which it will again charge interest.

A complex system then has to evolve to track the interest charges, print more money, value one currency against another, manage accounts and track the flow of money as it is inter-changed between various governments.

The benefit (and downside) of fiat money is that it has no “intrinsic value” and there is no limit as to how much can be created. Another problem is that when people begin to doubt the purchasing power of fiat money, banks fail and the currency collapses.

Today, worldwide government debt is in excess of $13 trillion with more dollars owed to financial institutions than there is actually in circulation. As more money is printed and lent out to repay this debt a cyclic problem emerges. If too much money is printed then the currency becomes devalued as the purchasing power is reduced.

The precursor of both fiat and commodity backed money was barter, where people engaged in the direct exchange of one type of good for another.

Aside from the obvious issue of fair trade (ensuring that the items being swapped both have the same value), barter has other problems such timing restraints and quantity restrictions. If you wish to trade corn for fish you can only do this if corn is in season. If you wish to trade a tonne of corn for a tonne of fish you have to ensure that you need a tonne of fish before you carry out the trade.

If the trade takes place now when corn is not readily available, or you are unable to use all of the fish now, then an “IOU” or intermediary resource is needed. When such an intermediary is introduced this becomes the basis of a commodity currency – money backed by a multilateral barter agreement between all participants.

Examples of early currency of a similar type appear throughout history:

• In ancient China tea leaves were compressed into “bricks”

• In medieval times Iraqis used bread

• At various stages in history Russians used compressed cheese

• Through the colonial era when gold was rare commodity money was present in the form of gunpowder, musket balls, corn and hemp.

• Today, cigarettes are traded in prisons and social-settings whilst in the remote parts of Columbia coca (or cocaine) is used in lieu of a nationally issued currency.

Each of these items was desirable in their own right and was inter-tradable with other items which the holder of the currency might desire to acquire.

One of the (many) stumbling blocks of this type of money is that not everyone in the community may desire the resource which is backing the currency. Furthermore where the price of the commodity is fixed (i.e. an hour of an accountants time in Australia is set at the same rate as an hour of an accountants time in Thailand) the currency is no longer driven by market forces. Exchange rates between various commodity backed currencies do not take into account the entire spectrum of products or services offered by each community as they fix all prices against a single unit of measure.

The other major problem is that commodity money is still issued by a central (reserve) banking organization. An end-user cannot create their own gold-backed currency if they are not able to acquire gold (gold not being a resource that everyone can create or come into possession of easily).

With the introduction of “barter dollars” as a method of keeping track of multi-lateral barter transactions, restrictions on barter are lifted and trade becomes more readily available. The “wants and needs” of some can then be met by the “wants and needs” of others in the community.

There are many advantage of multilateral barter over fiat currency:

MEMBERS PAY FOR THINGS THEY NEED IN KIND

·        Purchases are funded solely through the sale of the buyers own goods or services.

IMPROVED LIQUIDITY OF LOCAL COMMUNITIES

·       Currency does not have to be brought in from outside of the region.

·        Unused potential production, or unsold stock, can be purchased by businesses or individuals who have, in turn, the ability to ‘make’ their own money.

STABILIZATION OF WILDLY FLUCTUATING GLOBAL ECONOMIC SYSTEMS

·        The spending and acceptance of “barter dollars” becomes market driven rather than government policy driven.

·        Sellers are able to set their own international selling price for their product - external to the influence of major foreign currencies. Purchases of the sellers’ goods will be based directly on perceived value, rather than on the value imposed through the complexities of foreign exchange.

RESOLVES THE ISSUE OF THE SCARCITY OF MONEY

·        You don’t have to wait for the government or a bank to print and then lend out more money.

·        No waiting for more gold to be mined and put into the reserve banks vault

NEW MONEY IS EASILY GENERATED

·        Today’s method of earning money is simply a transfer of ownership of printed currency, not the generation of new currency from the labors of the population.

INTEREST FREE LOANS CAN BE PROVIDED TO DEVELOPING COMMUNITIES

·        Regions that have not yet earned “barter dollars” are able to acquire interest free loans which can be repaid through their own efforts.

·        A use fee is charged to manage these loans and cover any defaults from the group of members.

·        In a totally closed group little or no defaults can exist as the debtor would have no access to more “barter dollars” until the original balance was repaid through their own goods or services.

SOLVES THE ISSUE OF LOCAL SCHOOLS, HOSPITA