[P2P-F] An update on BIBO, financial stability standards, and the debt-virus hypothesis
Sepp Hasslberger
sepp at lastrega.com
Wed Feb 9 20:22:35 CET 2011
Dear Michel, Stephane,
I have looked at the English introduction pages, unfortunately my French is not good enough to understand something fairly technical and complex.
While I am happy to see that there is a universal dividend incorporated into this money system, I am not sure that it will work. As far as I can understand, there is monthly money creation by all members of the system, and with time the monetary mass will grow, actually the graphic for growth of monetary mass assuming a fixed number of members on this page
http://www.open-udc.org/en/money_rules
shows that there is a rather steep increase of the monetary mass, all serving the same number of members. This means that the currency will be inflationary by design. More money for the same amount of business means that products, or anything that is exchanged in this economy, will come to cost more and more as time passes. One could also say that each unit of money will be worth less and less as time passes. This is not a good basis for a monetary system.
It would be rather easy however, to engineer the system for price stability. All that would need to be done is for the money to be created with a date of expiry. Each unit on monetary value, once it has been created, would need to start losing some of its nominal value every month, until it expires (has no more value) at the end of a period to be determined. This would make sure that the monetary mass could be stable in the case of a fixed number of members. After the period of initialization, money created equals money lost to expiry. No inflation of prices would ensue, because the monetary mass stays constant. Such a mechanism would also mean that the monetary mass could grow in line with a growing number of members. The total monetary mass would thus depend on the number of participants, and prices in the system would tend to be stable.
Without such a mechanism, I am afraid the system would not be workable. Money, to be used for real commerce, should have reasonably stable value over time. Only by limiting the total monetary mass in accordance with the number of members, can this goal be reached.
Kind regards
Sepp
"The individual is supreme and finds the way through intuition"
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On Feb 8, 2011, at 7:05 AM, Michel Bauwens wrote:
> Many thanks Stephane,
>
> I have created a overview page at http://p2pfoundation.net/Open-Universal_Digital_Currency_Project
>
> Dear Sepp, could you have a look, present this project and eventually put it into context of other projects in this related space?
>
> I think the innovative part here is that it is directly linked to the mechanism of the universal dividend, and this is why it's particularly worth supporting,
>
> Michel
>
> On Tue, Feb 8, 2011 at 12:45 PM, Stéphane Laborde <laborde_stephane at yahoo.fr> wrote:
> You can present Open-UDC with :
>
> General presentation : http://www.open-udc.org/en/start
>
> And Money Rules : http://www.open-udc.org/en/money_rules
>
> You can add that Open-UDC go with a a progressive goal following three steps :
>
> 1) Implementation with centralised server
> 2) Implementation with hierarchical organisation
> 3) Implementation with P2P System
>
> Money rules are a money system named Open-UDC. The technical system in charge of the money rules is independant of Open-UDC and named Open-UDS.
> Stéphane Laborde
> 9, rue Ganneron, 75018 PARIS
> Tel. 09 54 87 03 18
> Mobile : 06 64 42 25 99
>
> Le 08/02/2011 06:36, Michel Bauwens a écrit :
>>
>> Cher Stephane,
>>
>> If you have any non-technical text on this, I'd like to announce it on the p2p foundation blog,
>>
>> Un grand merci!
>>
>> Michel
>>
>> On Tue, Feb 8, 2011 at 12:34 PM, Michel Bauwens <michelsub2004 at gmail.com> wrote:
>> didn't know that one! will definitely check out and add to http://p2pfoundation.net/Category:Money,
>>
>> Michel
>>
>>
>> On Tue, Feb 8, 2011 at 12:29 PM, olivier auber <olivierauber2 at gmail.com> wrote:
>> Ok!
>>
>> J'oubliais, La Théorie Relative de la Monnaie (TRM) est la base du développement du
>> Open-Universal Digital Currency project
>>
>> http://www.open-udc.org/en/start
>>
>> Et ça c'est en anglais, entre autres...
>>
>>
>> Olivier
>>
>> 2011/2/8 Michel Bauwens <michelsub2004 at gmail.com>
>> thanks a lot Olivier, if you hear from the english translation at some point, thanks for letting me know!
>>
>>
>> On Tue, Feb 8, 2011 at 12:19 PM, olivier auber <olivierauber2 at gmail.com> wrote:
>> Bonjour matinal Michel,
>>
>> Sur ce sujet, j'attire ton attention sur un auteur français à l'origine d'une très intéressante "théorie relative de la monnaie" qui permet de calculer très exactement différentes choses, notamment l'expansion de la masse monétaire conduisant à une économie durable, ainsi que le montant du Dividende Universel qui serait le vecteur de cette expansion.
>>
>> Il s'appelle Stéphane Laborde.
>>
>> Le livre est ici : http://www.creationmonetaire.info/2010/11/theorie-relative-de-la-monnaie-10.html
>> Le blog là : http://www.creationmonetaire.info/
>>
>> Malheureusement, tout cela n'existe qu'en français pour le moment.
>> Un traduction en anglais est en cours, je crois.
>>
>> Amicalement
>>
>> Olivier
>>
>>
>>
>>
>>
>> 2011/2/8 Michel Bauwens <michelsub2004 at gmail.com>
>>
>> Dear Sepp,
>>
>> because the discussion is largely technical, this is all I can do, but perhaps you can add an extra comment?
>>
>> also, if you are in contact with Marc, please give him a chance to say something about the evolution of the bibo project since december 2009,
>>
>> Michel
>>
>>
>>
>>
>> Michel Bauwens
>> 16th February 2011
>>
>> In December 2009, Sepp Hasslberger introduced to us Bibo, a proposed standard for stable currencies, that would replace the current inherently unstable banking money system.
>>
>> This article has become our most comment rich article, in particular through a recurring debate between one of the Bibo co-authors Marc, and Ardeshir Mehta.
>>
>> Ardeshir has written an article that challenges one of the main points of monetary reformers, i.e. that the current system leads to the infinite creation of debt through compound interest.
>>
>> You can find it here.
>>
>> The context:
>>
>> “Currently, most if not all money is loaned into existence by banks, and is thus based on interest-bearing debt. There is no question that neither interest nor debt-based money are good for society, and I have written denouncing both debt and interest elsewhere. However, there is a fairly common thesis, based on the fact that money is loaned into existence as interest-bearing debt, that if new loans are not continually being issued in ever-increasing amounts, enough money will not be created to pay the interest on existing loans; and as a result, at least some those loans will be defaulted upon, resulting in inevitable foreclosures. “
>>
>>
>>
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