From: ta@itk.unit.no (Trond Andresen)
Newsgroups: sci.econ
Subject: New currency system
Keywords: proposal, history, examples, interest, ecology
Date: 9 Apr 92 11:31:48 GMT
Organization: Norwegian Institute of Technology / SINTEF, Trondheim, Norway

I want to promote an article circulating among "green"
econonomists worldwide. The article is a detailed
proposal for a new interest-free , but convertible, money
system (if you think this is contrasdictory, read the article).
It is written by the (now retired) director of the
Central Bank of Belgium, Bernard A. Lietaar.

The article is about 23 A4 pages, so I won't post it here.
I will , however, mail it to anybody interested. Reply if you
want it!



Here follows the abstract of the article:



A Strategy for a Convertible 
Currency

by Bernard A. Lietaar, 1989


ABSTRACT

This paper proposes a solution for countries which are characterised 
by four criteria: they have no convertible currency now, and they 
experience three problems - potentially or actually - unemployment, 
inflation, and ecological degradation. The proposed strategy provides 
a new convertible currency - hereafter called New Currency - which 
constitute a powerful mechanism to tackle simultaneously these three 
problems. Its only precondition is that they produce at least some raw 
materials for which an organised international market exists.

Technically, this New Currency is a combination of two concepts, 
usually analysed separately: stamp scrip, and currency backed by a 
basket of commodities.

Stamp scrip is a medium of exchange characterised by a small 
monthly "user fee", or "negative interest" charge. This user fee gives 
an incentive to the bearer not to hoard this currency. Its practical and 
demonstrated economic effects include a strong positive impact on 
employment creation and on inflation control. It also provides 
structural support for ecologically sound economic growth. While the 
concept of "negative interest rates" may appear unusual at first sight, 
it has solid theoretical backing behind it.  Even more importantly, it 
has been tested and used with remarkable success in a variety of 
cultures and historical settings, including as recently as the 1930's in 
Western Europe.

The second concept - a currency backed by a predetermined basket of 
commodities - is more familiar. One original aspect here is that the 
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 of the basket. This approach provides unusual stability 
for the international value of the currency, while guaranteeing 
substantial flexibility in the way the country fulfils  its commitments .                 

The stamp scrip concept actively promotes internal economic stability 
and employment growth, while the basket of commodity concept 
ensures immediate convertibility to 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 costs of storing, insuring and delivering to their respective 
international markets the underlying commodities of the basket.

Significant advantages are provided by the proposed approach: 

o	the New Currency would become one of the more stable of today's 
convertible currencies, without requiring open-ended financial 
commitment or any new international agreements;

o	the New Currency would constitute a powerful tool to meet three 
objectives: employment creation, inflation control, and ecological 
improvements;

o	the New Currency would be a very flexible tool: it can coexist with 
the current currency, it can be introduced centrally or in a 
decentralised way. It is also highly amenable to pilot programs on 
any desired scale.



(-- end of abstract)



Interested? 



Trond Andresen