Green Convertible Currency

From P2P Foundation
Jump to navigation Jump to search

Bernard Lietaer's currency reform proposals center around the creation of a green convertible currency

URL = http://www.transaction.net/money/gc/gc01.html

Bernard Lietaer: "Many countries of the world face a fourfold dilemma. They are experiencing unemployment, inflation, and ecological degradation, and they lack a convertible currency. They produce some raw materials for which an international market exists, but because of the burden of debt servicing and a soft currency, their dilemma yearly becomes more acute. This article proposes a solution in the form of a new convertible currency, that I call New Currency. This comprises a combination of two familiar concepts: stamp scrip and currency backed by a basket of commodities."

1. Stamp scrip's and `basket of commodities' explained

"Stamp scrip is a medium of exchange characterized by a small monthly "user fee" or "negative interest" charge. This fee was typically levied by requiring a small stamp to be affixed to the back of the bill each month to revalidate it. The user fee gives an incentive to the bearer not to hoard this currency. Its practical and demonstrated economic effects include strong, positive impacts on employment creation and on inflation control. It also provides structural support for ecologically sound economic growth. It has been tested and used with remarkable success in a variety of cultures and historical settings, including Western Europe as recently as the 1930s. The second concept--a currency backed by a predetermined basket of commodities--is more familiar. An original aspect of my proposed plan is that a country's central bank would guarantee delivery of the value of the basket but would remain free to deliver it in the form of any mix of the commodities included in it. This approach provides unusual stability for the international value of the currency, while guaranteeing substantial flexibility in the way the country fulfills its commitments. The stamp scrip concept actively promotes internal economic stability and employment growth, while the basket of commodities concept ensures immediate convertibility of the national currency and the international stability of its purchasing value. These two concepts fit together by equating the negative interest rate of the stamp scrip with the approximate costs of storing, insuring, and delivering to their respective international markets the commodities in the basket."

Presentation of Bernard Lietaer's book, "The Future of Money", at http://www.transaction.net/money/book/

Interview of Bernard Lietaer, at http://www.nexuspub.com/articles/2003/july2003/interview.htm