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Forum Post: How the current financial system can be ended

Posted 2 years ago on April 16, 2012, 8:56 a.m. EST by niphtrique (323) from Sneek, FR
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Interest on money contributes to social dislocation, environmental degradation and economic crises. Interest introduces risk in the financial system as interest is an allowance for risk. Interest gives the economy a short time bias as money in the present is preferred to money in the future because of interest. Interest increases wealth inequality as the poor pay interest to the rich. Interest leads to slavery because many people cannot repay their debts with interest and become the serfs of money lenders. Because of interest, there is a strong competition for money, which promotes unethical behaviour and crime. Interest is also the cause of economic booms and busts.

Natural Money is a solution for those issues. Natural Money has a constant money supply, a holding tax and a ban on charging interest. Because people have to pay a holding tax on money, they are willing to lend out money without interest. Because the money supply is constant, any economic growth will result in lower prices and a rise in the value of the Natural Money. Because there is constant economic growth, there is always a real return in lending money at zero interest. Because of the constant economic growth and full employment, investments in an economy based on Natural Money will lead to superior returns.

Examples in history demonstrate that an economy based on Natural Money is feasible, stable and can lead to prosperity. In the past similar types of money have been used. The most interesting examples are the grain receipts used in ancient Egypt after Joseph had advised the pharaoh to store food for the seven lean years and the introduction of the complementary currency in Wörgl, Austria, during the Great Depression. Natural Money is theoretically the most efficient type of money and will replace all other forms of money as soon as it will come into existence. This nearly happened in 1933 after the experiment in Wörgl turned out to be a success. It can happen any time as soon as the experiment is repeated.

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