giovedì 23 febbraio 2012

A land backed currency


What Greece needs is a land backed currency (and so does New Zealand)

I have just been listening to the most informative and important interview by Adrian Wrigley of the Systemic Fiscal Reform Group in Cambridge, UK.  Here it is: http://podcast.3cr.org.au/pod/3CRCast-2012-02-22-19953.mp3
Karl Fitzgerald of Earthsharing Australia interviewed him on the radio station http://3cr.org.au on a programme called The Renegade Economist.
To address the problems of Greece, and for other reasons, Adrian is studying the economic history of Germany during the early 20th Century, and says it is tragic that Economic History has been dropped from economics departments of universities because in history lies a lot of wisdom and knowledge. He describes what happened leading up the period of hyperinflation in 1923 and then what the German government did to solve it. They banned the private reserve bank from issuing currency for profit, formed a new reserve bank which issued paper money backed by mortgages and this stopped hyperinflation really quickly. It was called the Miracle of the Rentenmark. However, (as with Gesell inspired currency in Wørgl Austria some ten years later), the banks quickly stepped in. The Rentenmark was a danger to the status quo. A land backed currency is the big danger for the ruling classes.
However, like the other miracle, Wørgl, it only lasted a very short time. Soon the banks stepped in to have their way.
This is quite a long interview but full of fascinating facts. Well worth the time out of your day. It makes me realise that noone who really cares about monetary reform can turn a blind eye to the fact that the owners of banks will do anything to squash land backed currencies and kill them instantly. It reminded me of a time when I was writing my book and discovered that land tax went out at the same time as the private banks insisted that the NZ government use income tax instead. Before then we were reliant on just excise taxes and land taxes. And since then we have assumed that income tax is normal! Our money system is backed by income tax, not by land. The private banks, creating money for profit, have got that windfall. No wonder they are falling over themselves to lend to farmers.
It also reminded me of the struggle within the complementary currency movement to invent a currency backed by land. Everyone has talked about it, but to my knowledge it has never been done. It remains a dream. Now I can see why.
I hope you enjoy the interview. A lot of history in it. It is great on Greece too. 

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