Of course, the only way to really test this system would be to let a pack of hedge fund/k street gorrillas https://www.youtube.com/watch?v=8C-e96m4730 try to game it.

Actually, I’m worried about the government going rogue and surrounding the MA with tanks and telling them to inflate the supply because war drums are pounding, or a false flag event was foisted on the people.

The MA is to restricted to very tight bounds, a very narrow focus, and should have independent review. At some level, civilization needs an institution it can trust. Keeping everything in broad daylight and exposed is about the best we can do. If we cannot do that, we don’t deserve civilization. I personally think there are trustworthy “sheepdog” people walking among us in the population. Most of the people who visit this site would be good candidates for MA employment.

But, I agree: There should be no unlawful tracking, restriction, or rationing – the people are to have maximum freedom, which is why I wish them have their own money.

However, be wary of the physical unit’s design. For example, the physical form in the past e.g. gold and silver, has been used to control the abstract ledger (clay tablet) figures. Predators in the population cannot be given the money power.

My view: We are now hurtling into the future, and all money is becoming abstract numbers in a data base. Worse, credit money as an abstraction is controlled by illuminist private entities who hypothecate and use usury to fund tyranny.

How to handle the physical form of money, how to construct the MA, how to staff the MA, is up for grabs. We can figure it out, I’m making initial suggestions here and I definitely appreciate any thoughts to making it work. Synergy happens in a team, and the end result is always better than that created by one person. There are bound to be holes and details not considered that will need patching.

Also, this construct is difficult to grasp at first, because it is a reality unlike what we live in today.

“I agree with this comment – 0% interest is the ultimate end to usury. At first glance, negative interest may seem an antidote to positive interest (usury) but when one views the mechanics; we find that many problems associated with usury would remain” – “Money stored as bank savings is available to be lent out to borrowers. Savings are at zero percent interest, and made available to borrowers under a contract brokered by banker.”

Actually demurrage isn’t really negative interest. It appears so to the user, because every time they choose to hoard their money, they have to pay a fee tax if their money is not up to par. The Fee is recycled into the money supply by MA re-spending. Think of it as a fee that makes money appear to degrade at the same rate as goods and services. In this way, there is no mismatch of types. Our money medium then matches our output, which is goods and services. We use money to trade our output, and our output in the form of goods and services suffers entropy.

I didn’t treat savings well in the article. Think of your savings account as holding savings stored as shares, or possibly even precious metal. It is up to you how to invest, and your banker is always looking to help you …for his fee. I will suggest that 3% per year may even by too high of a fee in an economy where prices remain stable for decades. In that world, long term investments at 3% may become viable. In this new world, the cost of things drops dramatically, because rents in the form of usury are not embedded in prices. Also, land is not driven up in artificial price because it is no longer they hypothecation source for money creation. I would expect homes to cost a fraction of what they do now, and said home could be paid off in short time frame, probably 7 years or less. Also, the housing stock is likely to be gifted from generation to generation as savings in the form of wealth (not money) grows, and people are no longer debt slaves. The total stock of demurrage taxes is actually very small, because the money supply shrinks. If velocity goes up by 50X, the total money volume must shrink by that amount. The large gift economy sector also does not need money. Taxes are against the volume, not the velocity.

For very high risk investments, your share price of a business or venture is asked to grow at a high rate, not the money supply. If the venture is successful, then the share may command money from the economy when it is sold. If wealth in general is increasing and said wealth is demanding money for trading, the money supply has been following along as MA injects into the base of the population. Remember MA uses CPI to determine injection or drain. China, for example, has a larger money stock now, as their wealth is increasing. Growing the money supply with increasing wealth is non- inflationary, as it matches increased “monetized” goods and services.

Anthony wrote: “The easiest and most transparent way of migrating to a usury-free economy is by simply replacing the usurious credit based money supplies of today with interest-free credit.”

I agree with this comment – 0% interest is the ultimate end to usury. At first glance, negative interest may seem an antidote to positive interest (usury) but when one views the mechanics; we find that many problems associated with usury would remain.

“Money stored as bank savings is available to be lent out to borrowers. Savings are at zero percent interest, and made available to borrowers under a contract brokered by banker.”

Banks become recyclers of existing money and the money we hold at banks may be lent out to others. Would it still be available to the “savers” if it has been lent out to others? Who would want to lend money for mortgages that may require the “saver” to wait for 30 years?

And, what if there is a bank run? This heightens the concern with depositing money in a bank account where it will effectively become someone else’s asset.

I can see how companies like James Turk’s “GoldMoney” would prosper by such a set of circumstances. GoldMoney allows people to buy allocated precious metals that are held in repositories. The value may be traded with other account holders or the precious metals may be exchanged for currency at will. They would enable people to avoid banks and their “demurrage holding tax” while storing their wealth in speculative assets. There would be many other models created to side-step the demurrage tax, especially for the wealthy (e.g. pirate coves).

Borrowers are now under pressure to spend their newly loaned money, or they will be penalized with a holding tax. The holding tax is the minimum necessary to force money into maximum velocity. Three percent per year perhaps is enough – the tax rate may be derived by experience.

Perhaps as an unintended consequence, you would push companies to spend profits as quickly as possible rather than building their balance sheets. If a manufacturer wanted to build their balance sheet, they could pass on the “Three percent per year perhaps is enough” (demurrage holding tax) to others in the supply chain. The next link in the supply chain (e.g. wholesaler) might do the same thing and the next link (e.g. retailer) might do the same thing which would lead to compounded negative interest (interest on interest) and subsequently, a higher cost of goods to the consumer.

Excess money travels pipe 13 or 14 to buy Government Treasuries. Foreigners buying Treasury Bonds are effectively making a loan to U.S. government at zero percent. U.S. government is then compelled to spend as the former foreign money (due to trade imbalance) is date stamped.

In my opinion, a sovereign nation should never indebt itself – if it does, it is no longer sovereign. Treasury notes represent a mortgage upon the private and public property of the Nation.

Pledging private and public collateral is part of the fraudulent sovereign debt scheme. A sovereign nation may directly use its credit alone to issue money – there is no need to incur any debt or to encumber private and public property. Our government has unnecessarily and egregiously leveraged the property and resources of the nation for no reason other than to satisfy the claims of private banks and investors that lend money that they don’t have.

” Monetary Authority (MA) issues new U.S. Dollar money into the accounts of Households.”

I take it that you mean that the money is created debt and interest free? It is a national dividend of sorts. If so, I like the concept and think we need to find ways to get debt free money into the economy to try and right the “debt is greater than money” imbalance.

Ross Noble is well known here at Real Currencies as REN for sharing his wisdom generously. He has been creating an approach based on debt-free money, spent into circulation by the people, basically Social Credit. The problem with Social Credit is that it does not end Usury and Noble suggests a demurrage to achieve that.

This author says it better than I can:

http://www.secondspring.co.uk/articles/borruso.htm#8back

“When demand is not satisfied with the amount of tribute expected, as happens in time of prosperity, it withdraws from the market, causing economic stagnation, deflation, unemployment and depression, as happened in the years 1932-39. This is the reason for the economic cycles, not the sun spots as Prof Jevons (1835-82) in all seriousness proposed, or other queer reasons offered by conventional wisdom.” …. And

“The undue advantage [Capital] is embodied in a tribute that supply is obliged to pay to demand. Either supply lowers prices to the level imposed by demand, or pays interest to get a loan of money. Gesell identifies usury with this tribute, and not with theories of “fecundity,” “productivity,” “profit,” “missed gain,” “money that works,” “excess interest,” or “exploitation.” Usury is a form of power. From this primary imposition it gets transferred to everything that demand and supply exchange, from capital to consumer goods.”

Our “savings” will be in the form of wealth, maybe share percentages in other people’s homes, maybe in certain businesses, in art, education, health, etc. The market won’t be driven into booms and busts because the money system no longer has unwanted positive feedback in the form of leverage, usury, or volume displacement.