|
Barter Is New Medium Of
Exchange |
|
| In just the past
week several pillars of the Fortune 500 have declared more than 75,000
layoffs worldwide. This is an indication that the global economic and
credit crisis is getting worse, not better. Yet Americans remain
optimistic that the crisis will blow over soon. Part of this optimism is
based on their continuing ability to get what they want using a credit
card, or paper money that carries no intrinsic worth. In other parts of
the world this no longer works. High food prices and the credit crunch
have forced some countries to revert to the ancient practice of
bartering, a practice that is also seeing a revival in America
correlated to the financial crisis. Signs of return to the barter system are appearing all over the U.S. Caught in the grip of the credit crisis, small business owners are resorting to the barter system as a way to keep their precious cash in reserve. Frozen capital markets mean little new money is finding its way to Main Street. Loans to small businesses have fallen by 30 percent from pre-crisis levels, so cash is prized. Small businesses have historically been the growth engine for the American economy, creating the bulk of new jobs. Now without credit, they are shedding employees at an alarming rate. Barter exchanges may be one of the few businesses to thrive in today`s environment. According to a recent New York Times article, barter exchanges range from publicly traded entities like International Monetary Systems and ITEX Corporation to smaller companies like U-Exchange.com. Membership and transactions are growing at a rapid rate, with one exchange reporting a 70 percent increase in business since the beginning of the credit crisis. |
In the past,
bartering involved the simple exchange of goods between one person and
another. Today multiple parties can meet through online exchanges and
accumulate credits that can be used against future transactions.
Participants from around the world can participate. Hundreds of exchanges
are available online. Bartering in the U.S. is estimated to
generate more than $3 billion in business, and this figure does not
include direct bartering between corporations. Some of the
barter exchanges even offer credit to members who have been turned
away by traditional lenders. Even on the individual to individual level bartering is on the increase. Watches, baseball cards, cupcakes and cookies, artwork, a journal entry, a bike and a dog were all accepted in a single day as barter for dentistry in Tupelo, Mississippi. In St. Louis, out of work contractors are eager to barter for basic goods and services that include legal counsel. A New York attorney has offered to prepare simple wills and healthcare proxies in exchange for getting his floors sanded and his house painted. Barter should be a consideration in everyone's emergency plan On the survival level there appears to be some resistance against thinking about and planning for bartering. It may be that the idea of bartering between individuals for basic necessities implies a level of chaos extreme enough to be mind numbing and to cause a paralysis of will. However, anyone who foresees financial Armageddon may want to prepare to barter. |
