Deirdre’s reply to an article on STUFF-CAN YOU FIX THE ECONOMY

Lara. What a delight to find your excellent article on Stuff! It is great that you were able to reproduce the graph published by Margrit Kennedy showing the effect of interest on widening the gap between rich and poor. This big study needs to be repeated in many countries.

One correction. Bernard Lietaer contacted the Wōrgl museum and discovered that the work certificates (the local currency issued with demurrage) circulated eight times as fast as the national currency. Whereas the work certificates circulated about once a day, the national schilling circulated about once a week.

Bernard Lietaer has co-authored four books published this year. Anyone who thinks he doesn’t know what he is talking about should answer the question “How come with the monetary system we now have, are there so many banking crises, monetary crashes and sovereign debt crises.” In the period between 1970 and 2010 the IMF has identified 145 banking crises, 208 monetary crises and 72 sovereign debt crises.

And now we have the mother of all crises unfolding before our eyes in US and Europe and the contagion can’t help but come our way. Lietaer and Belgin in their book New Money for a New World advocate a money system balanced between yin currencies (e.g with a demurrage) and yang currencies (with interest). They make the point that each country has a monopoly national currency and this is leading to the structural problems we now face.I think that the study of those economies of Dynastic Egypt, and the Central Middle Ages is showing that when there is a charge on the hoarding of money as in demurrage, a paradox exists. Holders of money spend it on long term investments like cathedrals, solidly built houses, artwork, good maintenance of equipment etc.

The same would happen today. People in their forties and fifties could properly prepare for their retirement, not just rely on financial advisers whose advice has included Ross Investments and finance companies which have gone bust.