NPR has an article on local currencies in Germany - Fiscal Localism On Rise In Germany.

The Havelbluete, the Augusta and the Chiemgauer might sound like the names of locally brewed beers, but they are in fact micro-currencies which, like micro-breweries, are in abundance in Germany. There are more than two dozen local currencies in circulation, and 40 or so initiatives are about to start printing their own banknotes. These notes are not gimmicks. They're recognized legal tender -- at least within each local region. More than two dozen local currencies are in circulation.

NPR's Eric Westervelt went to southern Germany to try to find out why such monetary localism is on the rise in Europe's largest economy.

Alex at WorldChanging has a post pondering how cities can be transformed to sustainable models during a credit drought - How Can Bright Green Cities Thrive Without Capital ?.

What do you do when things are booming but your credit's dried up? Perhaps you begin to invent new ways of doing business.

U.N. Habitat recently released a report showing that the pace of urbanization is increasing, with "200,000 new dwellers flooding into the world cities and towns each day." That's like a new city the size of Seattle, Washington D.C. or Copenhagen springing up every three days. And while it is true that in the Global North, some industrial areas have become home to shrinking cities and others are in line for massive climate troubles, the trends suggest that most cities that are growing today are going to see long sustained booms in population.

But our cities are not only growing quickly, they're getting younger. We live on a young planet, with two billion people under the age of 15 and a median age of only about 27, worldwide. Already there is a massive unmet demand for jobs, housing and services. Youth unemployment is at its highest level ever in many countries, but that doesn't mean young people stop living. Indeed, while some of their energy is channeled into destructive outlets, from gangs to terrorism, evidence suggests that there's been a much larger explosion of activity in the so-called "informal economy" -- everything from "gray market" trading to casual labor to microbusinesses and community efforts. A faltering economy doesn't mean an end to enterprise.

Bright green innovations are generating all sorts of new business frontiers as well. Green building and design innovations spur new possibilities for development and renovation. Smart technologies drive new ways of looking at shared goods and spaces. Attention to foodsheds and footprints enable new models of feeding and clothing ourselves. The list goes on.

So on the one hand, we have the material for a remarkable boom: rapidly growing cities full of energetic, young people with unmet needs but access to a wave of bright green innovations.

On the other hand, we have a worsening credit drought. An increasing number of stories warn that we should not expect much available credit at all in the short term:

Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board.

The disturbing possibility presents itself that credit may not begin to flow again for years. A growing number of pretty credible observers already warn that, Wall Street talking heads aside, several big problems may dry up credit for some time to come. The biggest immediate problem seems to be that commercial real estate loans (for building apartments, offices, stores and warehouses -- $1.7 trillion in just U.S. loans) may be following residential lending off the cliff. In addition, while it's true that "green-technology firms attracted the largest share of venture capital in the third quarter," what hasn't generally been mentioned in green business stories on that news is that venture capital funds have shrunk to a 15-year low. Then there's the planet: other factors may cause investors to be even more skittish -- from the anticipated losses caused by climate change and ecosystem service degradation to the rising costs associated with constricting supplies of fossil fuels and virgin materials.

So, what does it mean to have an expansion, in a time when capital is extremely difficult to get? What does a "dry" boom look like?

The Harvard Business School has a post a "Finance 2.0" by Umair Haque looking at some necessary reforms to keep capitalism functioning - The Finance 2.0 Manifesto. It links to my post on locabucks in the section on micro-currencies, in yet another example of my failure to remain completely disreputable (though the publishing date was April 1, so maybe this is the HBR's idea of an April Fools joke).

Here are nine paths to igniting the next financial revolution.

Edge funds.

An edge fund is the opposite of a hedge fund. Where hedge funds are opaque, edge funds are transparent. Where hedge funds are closed, edge funds are open. Where hedge funds are run for near-term gains, edge funds are in it for the long run. Where hedge funds create artificial book value, edge funds create value that accrues to real people and society. Where hedge funds focus on long and short transactions, edge funds focus on relationships. Think Marketocracy on steroids.

Macro and microcurrencies.

A currency tied to national interests determined by a political elite? That's so 20th century 16th century. A better financial system needs better currencies. Finance 2,0 will be built on microcurrencies and macrocurrencies: currencies which operate hyperlocally and transnationally. Why? Because people shouldn't have to bear collective responsibility for bankers looting or regulators cahooting. In the 21st century, the quiet tyranny of economic collective responsibility is intellectually bankrupt: it is fundamentally unjust, deeply inefficient, and vastly value-destructive.

Social banks.

Despite what marketers tell you, banks do not exist to maximize profits. They exist to maximize the safety of deposits. We've been taken for a very expensive ride. Next-generation banks will be structured as social enterprises — because the incentives to safeguard deposits and reinvest profits for the common good perfectly converge to a dominant strategy for long-run value creation.

Fair markets.

Markets are free like a fish is a shark. Anyone can play — but only at the risk of being manipulated, looted, and defrauded by the deepest-pocketed. The anonymous arms-length transactions orthodox economics lionizes are, in practice, just a hyperefficient mechanism for front-running, predatory trading, and bid rigging. Next-generation markets aren't just free: they're fair. They are markets where information about reputation, reliability, and relationship thickness are hardwired into the DNA.

Stakeholder communities.

Institutional investors are so 20th century. Centralizing control over our biggest corporations in the hands of a bunch of old dudes asleep at the wheel was as good an idea as the spork: interesting in theory, useless in practice. Tomorrow's radical innovators are already updating corporate governance for the 21st century, by letting communities of stakeholders shape managerial decision-making. Think mega-Etsy.

Whisper bullhorns.

Why is trading such a great business? Because traders have access to info that you don't. Why can't everyone get in on the whisper circuit that powers prop desk profits? Because no radical innovator has taken on the challenge yet of amplifying the secretive whisper circuit into a blaring bullhorn. But imagine if the rumours that drive share prices up and down on trading desks were Twitterfied. The result would be a financial revolution: the market power Big Trading enjoys would vaporize faster than you can say "insider info."

Googlizing financial instruments.

What business is Wall Street really in? The business of hoarding information: to seek a so-called informational edge. Of course, markets don't work if everybody's hiding info — they only work when people are revealing it. Google can help me find a tennis racquet, Match can help me find a date, and Last.fm can help me find some tracks to rip — but who can help me find a better place to put my cash that effortlessly? No one. And that's a massive reason why we're stuck with a 1.0 financial economy.

Anti-ratings.

Your credit is rated mercilessly. But does anyone rate lenders — not to mention brokers, banks, and investors? Today's crisis would have been far less severe if consumers had access to knowledge about who was a trustworthy lender — and who was going to sell them the financial equivalent of a roadside bomb. Credit ratings alone cannot create more efficient financial markets — doing so requires better information about both buyers and sellers of every kind of financial product.

Open source modeling.

Every bank built the same models. Every bank built the same flawed models. Every bank built the same flawed models on similarly erroneous assumptions. How dumb is that? Incredibly. Unleashing the power of open source to vaporize this black hole of incompetence is going to be a tremendously powerful path to innovation. The peer review, voluntary contribution, and always-on negotiation at the heart of the open source model create powerful incentives for quality — which is exactly what the hare-brained quants at banks lacked.

Finance 1.0 cannot power growth 2.0.

Yesterday's finance cannot power tomorrow's prosperity. Bailouts, taxes, nationalization, regulation are what your discussions this week are focused on. These can limit the depth and intensity of the crash. But what they cannot do is build a radically more efficient, productive, and effective financial system.

That requires a better kind of finance altogether — one designed not merely to make the worst among us richer, but to make us all authentically, meaningfully wealthier. That's why finance 2.0 is the future.

Chris Cook (of Iranian Oil Bourse notoriety) is proposing a variation on the ideas used for local currencies, promoting oil, gas and land based monetary units to the Iranians - Petro Clearing January 2009.

WorldChnaging has a post on a site for managing local currencies (or locabucks, as I call them) - Create Your Own Currency.

"Money," wrote Jamais Cascio, "is the tangible manifestation of an agreement between you and other people that the oddly-colored piece of paper in your hands has value."

But what's truly valuable is not those units of currency, so much as the units of time they represent to those who earn and spend them. Two women from Ashland, Ore., who follow this philosophy have created a way to turn units of time into currency that can be directly traded and tracked through their online system OurNexChange. This "community currency" allows local residents to buy goods and services without exchanging any money.

Sharon Miranda and Libby VanWyhe recently told the Ashland Daily Tidings about the system:

"The whole idea is to harness the resources of our businesses, organizations and government into a system that provides sustainability," Miranda said.

This would be done through a Web-based system that would track the exchange of currency units through users' accounts. There would be no tangible money.

"The idea is it's an online complementary currency exchange program," VanWyhe said.

To get started, all you need to do is apply. After that, you are awarded "Trade Dollars," which you earn by volunteering, working for a neighbor or bartering. If you watched your neighbor's children for an hour, for example, he could pay you in Trade Dollars online or could trade you for an hour of weeding in your garden. Using the OurNexChange system, you can easily record and keep track of this time and work. Businesses and organizations will also be allowed to participate, and will be awarded a line of credit to begin with to get things moving.

A community cooperative will help run the transaction fee funded system, but what will ultimately sustain the community currency will be a willingness from the community to participate.

The system, which took about six years to create, mostly relies on trust and transparency. Each transaction takes place online, and is recorded within the system. Users can then rate and provide feedback for each other, search the directory or use the systems networking tools.