Gisellian demurrage currency

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Dr. Keen,

I am won­der­ing if you have ever seri­ous­ly con­sid­ered issuance of Gisel­lian cur­ren­cy for coun­tries fac­ing unplayable debt (all of them, as far as I know).

The scheme I am imag­in­ing would have these govts pay­ing off bonds due with G‑currency. Bond­hold­ers would then, ASAP, spend it on real items in the econ­o­my, where it would even­tu­al­ly end up as wages, where work­ers would spend it, ASAP, on tax­es and con­sumer goods.

The demur­rage, say 12%/year (= 12 x 1% stamps)  would give this cur­ren­cy an annu­al veloc­i­ty of at least 12 since any hold­er of the cur­ren­cy would want to spend it before each month-end tax stamp would be due.

Of course, any debt financed cur­ren­cy would have a veloc­i­ty of less than 1, since that is the mon­ey def­i­n­i­tion of debt.


War­ren Raft­shol

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About Warren Raftshol

winemaker, running for Michigan governor 2010 on Greenback Labor ticket, Bay Bucks promoter, MS Civil Engineering Northwestern 1982, BSCE Michigan Tech 1978