- Bryan Bakker
Money Multiplier Effect
Updated: May 5, 2022
In economics, it's a standard tenet that money has a multiplier effect as it circulates throughout an economy. What this means is when you spend ten dollars at the corner store, if the owner of that store uses that ten dollars to buy some groceries, and then the grocer uses that ten dollars as part of the cost for a car, and the lady who sold the car uses that ten dollars as part of the cost of a staycation, that same ten dollars can account of many multiples of economic activity and the more that happens the stronger and better the local economy becomes.
You know where I'm going with this don't you?
Well you're right. The first thing to recognize is that that effect works especially well inside a barter exchange because, you guessed it, none of that money is being disappeared into offshore accounts or sent south of the border to top up some investor's dividend. Those dollars are staying right here, supporting local businesses and those who rely on them. Plus, the brokers who work inside your exchange work hard to make sure that multiplier effect is maximized by constantly pushing members to sell or buy and reminding them that:
A trade dollar account is not a savings account
The cost of your trade dollar is less than a cash dollar when selling
The cost of you trade dollar is equal to a cash dollar when buying
Its best to spend often and sell as often as possible
Keep this in mind when you consider the big picture around the many uses of your London Barter Network. Our slogan, Making Local Make Sense works on a few levels and is a powerful reminder of how we can do the smart thing for our businesses while also doing the smart thing for our community.
Visit www.londonbarternetwork.com to learn more.