Wednesday, May 30, 2012

Demurrage




Is a term used to describe the cost associated with owning or holding currency over a given period of time.


It is sometimes referred to as a carrying cost of money.

For commodity money such as gold, demurage is in practice nothing more than the cost of storing and securing the gold.

It is regarded by some as having a number of advantages over interest: while interest on deposits lead to discount the future and to place immediate gains ahead of long-term concerns.

Demurrage does the opposite, creating an incentive to invest in assets which lead to longer-term sustainable growth.

Furthermore, demurrage acts like inflation, stimulating the circulation of the currency, encouraging economic activity, and increasing employment.

Demurage-charged local currency was successfully tested in the Austrian town of Worgl between 1932 and 1934, until the Austrian central bank stopped the experiment.

Bernard Lietner also documents in his book Mysterium Geld the use of demurrage currency systems in Europe's High Middle Ages.
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Bracleate systems and ancient Egypt's ostraka - dated receipts for the storage of grain - and credits these currency systems with the great prosperity of these societies.
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There is great merit to be gained from creating a financial system that encourages thrift.
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That causes money to decline in value over time along with everything else on this planet.
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Challenge to you, name anything except money that does not decline in value over time.
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In all the talk of what we must now do little if any talk centres on the fact that the current system does not work, is broken, kaput!
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Until this is admitted talk of other approaches will be drowned out.
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Vested interests will not allow discussion, in any meaningful forum of ideas they do not own or control.
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Effort must be made to change this situation.
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The discussion of demurrage and negative interest are of importance.
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They offer an option to the current unsustainable system of positive interest.
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It need not be this way.
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If we all engage that is.
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Are you?

2 comments:

Anonymous said...

Look into Freicoin, a Bitcoin clone with built-in demurrage. http:///freico.in.

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