The supply of money or credit available at any given time should accurately reflect the wealth of material wares and services available for purchase in the near term. This is a principle which has been disregarded in modern money and banking, but must be heeded in establishing a healthy local exchange system. The intentional scarcity of official money has a destructive effect which can be overcome by supplemental local currencies. The supply of official currency is limited. It is created by entities external to the community which have little sensitivity to or concern for the needs of the local population.
Official currency can and does circulate far and wide.
It can easily be spent to buy goods and services from remote regions. Money spent outside the local community is no longer available to facilitate trading within the local community. It must be replaced by attracting money from outside, either by exporting products, receiving government transfer payments, or attracting tourists and businesses to come and spend. The universality of national currency, its greatest advantage from the standpoint of flexibility and spendability, is also its greatest disadvantage from the standpoint of local self-reliance and economic integrity. Rather than the lack of skills or physical resources, local unemployment and business stagnation are more often the result of the fact that the money necessary to connect needs with supplies has gone elsewhere.