Healthy Money Healthy Planet - library.uniteddiversity.coop

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example (see page 000), the demurrage­charged money circulated eight times as
fast as the national currency, bringing with it eight times the benefit in terms of job
creation and prosperity. In contrast, if the circulation is too slow the currency
begins to stagnate. Just as blood is a vitalising medium in our bodies, so money by
its circulation keeps the economy alive.
The best way to create a rapidly circulating currency is to impose a fee for
hoarding it. One way of doing this is to design money so that it is invalid if kept
past a certain date, as with New Zealand’s Fly Buys points, which are valid for
only three years. Another method of speeding up circulation is to create
demurrage­based money, which requires the payment of a circulation incentive or
demurrage fee on a certain date. Because people would rather avoid paying such a
fee, it acts as the motivator to keep the money moving. When people run out of
everyday necessities on which to spend their demurrage­based money, they pay
their taxes early or invest in more long­term items such as house improvements,
tree planting or works of art and architecture instead.
Preventing Inflation
Inflation is a rise in the average price of a basket of goods and services, which over
time erodes the value of money and cheats us out of our savings. Inflation in New
Zealand is evident in the fact that NZ$1 in 1950 was worth only 4¢ in 2000.
Prices are affected by the supply of money: if there is too much money
around, sellers put up their prices. But as we saw in Chapter 1, the unhealthy
interest­based money system we currently have demands that the money supply
keeps growing, and at an exponential rate. It is therefore clear that interestcharged
money is inherently inflationary. In contrast, complementary currencies
are issued interest­free and don’t demand this constant growth in their supply. In