Prof. Dr. Margrit Kennedy
Using New Concepts
WE
Can Rule Money?
Split 10.07.2012
According to an IMF – Statistik 2011
between 1970 und 2007 we have had
124 banking crises
326 currency crises
64 debt crises
Misconception 1:
Zunahme
Money with intereest and
compound interest
can grow forever
c
b
There exist different growth
patterns in the material realm
a. natural growth alone can
be termed sustainable
a
b. linear growth can be
sustained temporarily
Zeit
c. exponentielles growth
is soon coming to an end
2. The Transparency Misconception
Interest is paid only when we borrow money
1 Garbage Collection Fees
Cost of interest on capital 12%
2 Drinking Water Costs
Cost of interest on capital 38%
3 Rent in Public Housing
Cost of interest on capital 77%
Source: H Creutz
Misconception 3:
Everybody is treated
equally in the system
Interest payments and Interest
gains show large disparities:
80% of the population pays
twice as much as they gain
10% gain more than twice as
much as they pay
Source: H Creutz
Continual Inflation
Because of inflation, in the year 2001, every DM
was worth only 20 Pfennigs…
and this was the most stable currency in the
world!
Source: H Creutz
3500
Excessive Increase
in Foreign Exchange
Transactions
2500
2000
Speculative
Real
1500
1000
500
0
19
74
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
Billions of US$
3000
Year
Source: Lietaer
Of Human Wealth 2008
Exponentially
growing
Debt
AND
Assets
French
government
debt
as % of GDP:
Official debt
versus debt
computed
without
interest 19792009
1979 government debt was € 239 billion or
21 per cent of its GDP
2009, this had risen to € 1,088 billion or
78 per cent of its GDP.
Had Article 25 of the Law of 3 January 1973
not been in force, the French government would
have saved €1,306 billion in interest by 2009, and
the country’s total public debt would only be
8.6 per cent of its GDP.
Components in Interest for Loans and Credit
In the present money system
In complementary money systems
Bank Fees
1.7%
Bank Fees
1.7%
Risk Premium
0.8%
Risk Premium
0.8%
Liquidity Premium
4.0%
Liquidity Premium
0.0%
Inflationary Adjustment 1.5%
Inflationary Adjustment 1.5%
Total
Total
8.0%
4.0%
Comparison of Credit Costs
for average German household with
€ 30.000 /year
• interest costs of 40%
• demurrage half of that
€ 12.000 / household /year
€ 6.000 / household /year
Designing
Complementary Currencies
Creating new financial liquidity
for a limited purpose
LOCAL, REGIONAL and
GLOBAL CURRENCIES
or SECTORAL CURRENCIES
Sectoral CURRENCIES
two examples
Fureai-Kippu System, Japan
WIR Wirtschaftsring, Switzerland
Fureai-Kippu = Care Tickets
since 1995 in Japan
supports care of elderly
with help from younger people
who get hour credits
which can be used at a later date
in another part of the country
or by another person
WIR-WIRTSCHAFTSRING
PARALLEL CURRENCY SYSTEM
among small and medium businesses
since 1934 in Switzerland
15 Swiss regional WIR- organisations
60.000 members
average turnover per year 1.6 bio WIR
proves to have anti-cyclical effect
supports policies of government
REGIONAL CURRENCIES:
• partial decoupling from globalized economy
• increased use of regional products and services
• added value and surpluses remain in the region
• community keeps essential public utilities
• closer links between consumer and producer
• strengthening regional identity & diversity
• reducing need for transport and energy
A First Model for
Regional Currencies:
The Wörgl Experiment
Results in 13,5 months
between 1932 - 1933:
1. Unemployment reduced
by 25%
2. Town-Income increased
by 35%
3. Public works investment
rose by 220%
Regional money system based on vouchers
Figures for 2011:
Annual turnover
6 mio Euros
2.388 Members
600 Firms
200 Associations
Donations
50.000 Chiemgauer
Total since 2003
210.000 Chiemgauer
These
five villages
are supporting
members
paying
their fees
A Solution to the financial crisis in
Greece and other European countries
developed by the initiators
of the Chiemgauer
http://www.eurorettung.org/
Express Money is unique in two ways:
1) Via its spending incentive
- demurrage monetary circulation is accelerated
stimulating the economy.
Doubling monetary velocity doubles GNP.
2) Via the leakage inhibitor feature
an exchange fee for conversion into euro
money stays in the country
strengthening its economy
and reducing its trade deficit
• more favorable interest rate than euro credits,
thus facilitating
economic investment.
• quickly become the vehicle for domestic
payment transactions.
Differences between COMPLEMENTARY
and TRADITIONAL currencies 1:
use- instead of profit-oriented
limited instead of general acceptance
circulation incentive instead of interest
transparent instead of obscure creation
democratic instead of central control
Differences between COMPLEMENTARY
and TRADITIONAL currencies 2:
inflation-resistant
instead of inflation-prone
promoting community
instead of destroying it
Differences between COMPLEMENTARY
and TRADITIONAL currencies 3:
a win-win solution for everybody
instead of only ten percent of the
population
Sustainability of complex living systems
Optimum
100%
0%
Window of Vitality
Resilience
(Diversity + Interconnections)
Efficiency
(Streamlined)
Sustainability of complex living systems
Optimum
100%
0%
Resilience
(Diversity + Interconnections)
Present
Financial
System
Efficiency
(Streamlined)
Sustainability of complex living systems
Optimum
100%
0%
Effects of
Complementary
Currencies
Resilience
(Diversity + interconnections)
Efficiency
(Streamlined)
My change of
perspective between
1987
und
2012
New Society Publishers
Gabriola Island, Canada
August 2012
more on:
www.margritkennedy.de
www.monneta.org
www.kennedy-library.info