1) The existence of account entries depend uniquely on transfers of units from other accounts rather than the creation and transfer of goods and services.

2) That money generates commerce rather than the other way round.

3) That choosing not acquire goods and services is somehow harmful.

Demurrage lacks the exact rational foundation that interest lacks. It skews the value measure function by adding the artificial criteria of having to buy other than the value of goods and services. It also creates an unnecessary class of deciders of what rate to apply that can reap havoc on the economy if they make mistakes.

They could just as well decide to distribute them to the user base much like a basic income would be distributed, or to put them up as as coins that would go to miners in exchange for their work…

There are near infinite variations of what can be written into a program.

If yes, there should be other ways of understanding the nuance between these concepts… How to formulate it?

Thank you very much for opening us our understanding. These concepts seem essential now that Bitcoin-like solutions are debated.

Naively I thought that in demurrage the money just “melted” (magically 😉

In the wake of crypto-currencies, nobody invented melting money yet? I guess bitcoin can easily be upgraded to melt in time but probably the current bitcoin owners wouldn’t be happy about it.

The current (fashionable) crypto-moneys seem more adapted to melt by themselves than to give a cut to the government. Don’t you think so?

Let’s first define demurrage as a periodic but small percentage fee, to be charged on all “liquid” money such as cash and on-demand bank deposits.

That fee, which in the case of bank deposits is easy to collect, in the case of cash a bit more difficult, has to go somewhere. It should most probably go to the government, and it would do the same as any tax the government levies – it increases the money government has at disposition to spend.

Thanks!

On the former you have the pyramid and “Seclorum dollars”, on the latter you have E Pluribus Unum and “People dollars”. These are in tension and hence the confusion and bi-polarism of the country.

Seclorum Banks lend out money to create more capital. How does this work? They pick who gets lending based upon their valuation for potential contributions to the economy. As those investments “mature”, new wealth is created. These loans have nothing to do about gaining “interest” for the lender as Charles claims. In fact, interest may not even be an appropriate term to use for fees collected for servicing the loan and mitigating risk.

Rightly so, he states that the current situation has created a financial problem. The problem is probably not properly understood by anyone because it is related to Biblical narratives. The issue is that appreciate of money occurred without real contribution to the economy. This appreciation happened because of simple, predictable affects of supply and demand — more people (due to population growth) chasing after less land and property available — not, notably, by improving anything. That means no real value was created by the increase in wealth by property holders.

The solution to the problem is in the Pangaia Project. You don’t need to make a “negative interest” currency. Pangaia is explicitly set up to *redeem* the wealth of America (and the G– economy) by converting it to (and in) a new Creative Economy. While tempting to destroy the old iron structures of capitalism, Pangaia will instead create an alternative, parallel economy — in harmony with the old — while the Seclorum economy can accomplish its aims: a space-faring enterprise to continue the journey of their species (homo sapiens). Others will help create the beauty of the Earth and in-between a civilization will be made worth living in.

Demurrage is a fee on money. The proceeds go to the community via increased government spending power (less taxes to be paid).

Inflation is a general increase in prices. The gains from inflation go to the owners of property. As if by miracle, the property becomes worth more.

That is why I love demurrage.

In my experience as a currency designer, incentives work better than disincentives if the objective is mass-engagement.

Inflation is only an issue if the currency is issued against activity that doesn’t produce anything of value to the community in which the currency circulates.

@mikeriddell62