Prof. Dr. Margrit Kennedy Using New Concepts WE Can Rule Money? Split

124 banking crises 326 currency crises 64 debt crises According to an IMF – Statistik 2011 between 1970 und 2007 we have had

Misconception 1 Money with intereest and compound interest can grow forever Misconception 1: Money with intereest and compound interest can grow forever There exist different growth There exist different growth patterns in the material realm patterns in the material realm a. natural growth alone can be termed sustainable be termed sustainable b. linear growth can be sustained temporarily sustained temporarily c. exponentielles growth is soon coming to an end is soon coming to an end

2. The Transparency Misconception 1 Garbage Collection Fees Cost of interest on capital 12% 2 Drinking Water Costs Cost of interest on capital38% Cost of interest on capital38% 3 Rent in Public Housing Cost of interest on capital 77% Source: H Creutz Interest is paid only when we borrow money

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 Misconception 3 : Everybody is treated equally in the system 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

Excessive Increase in Foreign Exchange Transactions Source: Lietaer Of Human Wealth 2008

Exponentially growing Debt AND Assets

French government debt as % of GDP: Official debt versus debt computed without interest

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 Bank Fees 1.7% Risk Premium 0.8% Liquidity Premium 4.0% Inflationary Adjustment 1.5% Total 8.0% In complementary money systems Bank Fees 1.7% Risk Premium 0.8% Liquidity Premium 0.0% Inflationary Adjustment 1.5% Total 4.0%

interest costs of 40% € / household /year interest costs of 40% € / household /year demurrage half of that € / household /year demurrage half of that € / household /year Comparison of Credit Costs for average German household with € /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 members average turnover per year 1.6 bio WIR proves to have anti-cyclical effect supports policies of government

REGIONAL CURRENCIES: REGIONAL CURRENCIES: partial decoupling from globalized economypartial decoupling from globalized economy increased use of regional products and servicesincreased use of regional products and services added value and surpluses remain in the regionadded value and surpluses remain in the region community keeps essential public utilitiescommunity keeps essential public utilities closer links between consumer and producercloser links between consumer and producer strengthening regional identity & diversitystrengthening regional identity & diversity reducing need for transport and energyreducing need for transport and energy

A First Model for RegionalCurrencies: The Wörgl Experiment Results in 13,5 months between : 1.Unemployment reduced by 25% 2.Town-Income increased by 35% 3.Public works investment rose by 220%

Regional money system based on vouchers Regional money system based on vouchers Figures for 2011: Annual turnover 6 mio Euros Members 600 Firms 200 Associations Donations Chiemgauer Total since 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 A Solution to the financial crisis in Greece and other European countries developed by the initiators of the Chiemgauer

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

ResilienceEfficiency ResilienceEfficiency (Diversity + Interconnections)(Streamlined) Sustainability of complex living systems Optimum Optimum 0 % 100% Window of Vitality

Resilience Efficiency Resilience Efficiency (Diversity + Interconnections) (Streamlined) Sustainability of complex living systems Optimum Optimum 0 % 100% PresentFinancialSystem

Resilience Efficiency Resilience Efficiency (Diversity + interconnections) (Streamlined) Sustainability of complex living systems Optimum Optimum 0 % 100% Effects of Complementary Currencies

My change of perspective between 1987 und 2012

New Society Publishers Gabriola Island, Canada August 2012 more on: