chiemgauer, urstromtaler, landmark, kirschblüte and kann
By MortazaviBlog on Feb 08, 2007
Inspired by a long-dead German theoretician, Silvio Gesell, the currencies mine a hoary conflict in economics — usually pitting the mainstream against subversive outsiders — about whether paper money is a neutral medium of exchange whose purchasing power should be scrupulously guarded, or an instrument that could be manipulated to fulfill capitalism's untapped potential.
Dougherty notes that the value design for these currencies encourage people to use them more quickly. For example, "[in] the case of the chiemgauer, the notes lose 2 percent of their value each quarter if people do not spend them in time." (This policy increases the "velocity" of money.)
Some 21 such currencies exist in Germany. Some 31 more are in preparation and "Gerhard Rösl, an economist with the University of Applied Sciences in Regensburg, has also located similar experiments in Denmark, Italy, Scotland, Spain and Italy."
The main effect of these local currencies is an increase in the "velocity of money" in the local economy where they are used. The automatic devaluation rate of the chiemgauer, apparently increases its circulation by a factor of 3 compared to central bank issues used in the same market. The factor will obviously depend on a number of macroeconomic variables.
By "Open-Source Currencies," I mean currencies that are not sourced from central banks. These are often sourced, openly, from private non-bank or non-profit institutions.
You may wonder about the words in the title of this blog entry. They all refer to currencies issued by non-bank institutions.