Healthy Money Healthy Planet - library.uniteddiversity.coop

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and the like. However, unhealthy money is that which has an interest­bearing
component; none of the complementary currencies described in this book is
interest­bearing debt money.
4. If they are not to be quashed or outlawed, local currency systems will need to be
accompanied by a devolution of governmental power.
5. If a newly introduced community currency is likely to succeed to the extent of
strengthening a local economy and reducing unemployment, then it is wise to
prepare a case to defend it against legal attacks from central banks.
6. For any currency the critical factor is trust. The currency must be acceptable for
a wide range of goods and services, otherwise it will be of limited value. It is the
receivers of currency who endow it with value.
7. To enhance their use and acceptability, complementary currencies should be
easily convertible to one another and redeemable for the national currency.
8. The velocity of money circulation is very important. The best way to create a
rapidly circulating currency is to impose a fee for hoarding it that penalises only
the holders of money.
9.
Controlling inflation is still essential. The amount of money in a system must be
equal to the value of goods and services in that system.
10. Mutual credit schemes provide interest­free loans for small businesses.
However, they don’t work well if there are lax informal controls, they are not quite
as flexible as fiat money, and they should comprise a range of members with an
optimum mix of skills and goods, excluding specialists. The success of such
schemes depends on the trust developed and on the rigorous application of
sanctions. There is exactly the right amount of money in a mutual credit scheme.