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nutrients.
‘Speed money‘ therefore puts hoarded money back into circulation.
While an optimum speed is necessary, the speed must be natural – it can‘t be too fast. The
European nobles and bishops of the Middle Ages who issued bracteates every six months
containing less silver than the ones they had recalled did so for tax­gathering purposes.
But they got too greedy, and the rate of debasement subsequently became far too high.
Gesell recommended a demurrage charge of 5.2 per cent per year, while Wörgl applied it
at the rate of 12 per cent a year. In his book Stamp Scrip, Irving Fisher recommended a
demurrage charge of 104 per cent per year for the Depression scrip in the US, which of
course was way too high and didn‘t work. 17
Money velocity is usually the neglected factor in designing a currency. But it is vital
because it has the potential to reconnect money with the natural world and thus allow it to
make a huge step towards sustainable economic development.
But not everything deteriorates; the value of items such as gold, silver and platinum
remains the same or increases, and that of things like antiques, wine and paintings also
increases over time.
While it is true that the value of rare or irreplaceable items such as works of art and
antiques do increase, on the whole goods depreciate in value. Various authors have
estimated that the average rate of decline of the value of manufactured goods, agricultural
products, precious metals and services is about 3–4 per cent per year. 18
Before I move on to discuss business­issued currencies in the next chapter, I will look at a
hugely successful complementary currency system in Italy that uses a circulation incentive,
and a more recent example from Germany.
The Simec
This is the story of a remarkable local currency issued for political purposes by a retired