Feasta's Liquidity Networks

Slippers · 10-07-2009 2:22pm #1

To solve the twin problems of workers who want to work but can't because of a lack of money to pay them, and insufficient markets for goods and services because of a lack of money to buy them, Feasta is working on Liquidity Networks.

It looks like Kilkenny will be the first place to get this extra money.
Seems like they're making progress in Dublin as well.

A spot of good news, shame these people aren't running the country.

Victor · 11-07-2009 3:34am

What next pyramid schemes? Wasn't over-investing in property bad enough without getting into other daft ideas?

Kama · 11-07-2009 9:21am

Eh, seeing as neither the banks nor the Government seem to be able to produce a viable credit system, and we can't print more 'real' money...

I think it's a great idea. Silvio Gesell ftw?

jimmycrackcorm · 11-07-2009 7:56pm

Why set this up when you can just tell people to use Linden Dollars?

Slippers · 07-12-2009 12:39pm

There is now a two page brochure explaining Liquidity Networks and how they will help.

ei.sdraob · 07-12-2009 1:17pm

alarm bells ringing, alarm bells ringing

prinz · 07-12-2009 1:43pm

Ridiculous. Nothing more to add.

lostexpectation · 09-12-2009 6:51am

isn't this like a local currency, why the fancy name

Slippers · 09-12-2009 11:44am

I think it is to emphasize their use to replace lost liquidity.

Feasta has an explanation here: Escaping the Liquidity Trap

"The world economy is collapsing at frightening speed. Sales and orders are drying up, not because people's wants have been satisfied - they are as large as ever - but because many people's ability to find the money to pay for their wants is shrinking. The root of the problem is that money is being returned to the banks to repay past loans faster than new money is being injected into the global economy by fresh loans being taken out.

Governments have injected billions into their banking systems in the hope that the banks will stop the money supply contracting by lending more but, in the US and Europe at least, the strategy has failed. The rate at which loans are being taken out for everyday purposes such as property purchase and industrial investment is still falling.

This is entirely understandable. In present circumstances, why would the banks lend to the public and why would the public borrow? The fall in demand has left excess capacity in every major sector of the global economy and prices are falling. In the light of this, what projects can be found that would give borrowers a return sufficiently high to compensate them for running the risk necessarily involved in pledging their assets to secure a loan? They could lose their assets and make themselves substantially worse off. And, since their assets are falling in value anyway, would their banks accept them as adequate collateral to safeguard them against losing money themselves? The only people wanting loans these days are likely to be those whose businesses are in such deep trouble that the banks would not want to lend to them anyway.

..."

TGPS · 09-12-2009 12:36pm

Liquidity networks are nothing more than glorified gift vouchers.

The only advantage they offer is that they keep "money" circulating in a localised area.

Most schemes collapse quite quickly because of forgery - leading to substantial devaluation. Inevitably someone gets caught holding a bundle they can't shift.

I'd stay a million [real] miles away from them.

Kama · 09-12-2009 5:37pm

The only advantage they offer is that they keep "money" circulating in a localised area.

Isn't that sort of the point? If they are perceived as having value by the parties to the exchange, then it serves its purpose. The Totness Pound works on this basis.

The early model for these is the Worgl Experiment of Silvio Gesell, demurrage to keep the currency moving. Now that was too successful, and the central Gov shut it down because they wanted to keep their monopoly.

Slippers · 09-12-2009 8:30pm

TGPS wrote: »

Most schemes collapse quite quickly because of forgery - leading to substantial devaluation.

Each network will be administered by a trust which will have access to all of the accounts in that network at all times. They will increase or decrease the number of units in the system depending on the volume of trade so as to keep their value stable.

Inevitably someone gets caught holding a bundle they can't shift.

I'd stay a million [real] miles away from them.

The idea is that the local council will accept them as payment for charges, including business rates, so businesses and individuals will have a use for them and be interested in earning them.

phoebebright · 10-12-2009 2:48pm

We are building a list of FAQs on the website http://theliquiditynetwork.org/faqs-2 to help explain the concepts behind the system and how they might be put into practise. The network is still being discussed at Feasta and your questions are welcomed.

How a Liquidity Network differs from a Paper currency: http://theliquiditynetwork.org/faqs-2/#faq_32

How a Liquidity Network differs from gift vouchers, Linden dollars and many paper currencies
http://theliquiditynetwork.org/faqs-2/#faq_33

Slippers 2 · 06-06-2010 11:15am

Updates.

1. Submitted to Your Country, Your Call:

www.feasta.org/documents/liquidity_network/2010_YCYC.pdf

Electronic currencies to boost local businesses

Introduction

Imagine what would happen in your community if a large sum of money, the equivalent of a million euros perhaps, went into circulation in a form which prevented it being spent in any other part of the country and which rewarded those who earned it for spending it again as soon as possible. The new money would pass quickly from person to person, and from business to business, enabling a much higher level of trading to be achieved in the local area than is possible at present because of the shortage of liquidity produced by the banking crisis.

A group connected with Feasta, an economic think-tank based in Ireland, is proposing to test exactly this sort of money later this year. Cork, Kilkenny, Ennis, Dundalk and Ranelagh have all expressed interest in being the base for a trial. Other places will be able to start a Liquidity Network, as the system is called, once the trials have been completed successfully.

The new money, called the quid, will be entirely electronic. It will be issued by a local trust In each community and passed from user to user in three ways – mobile phone, the internet and special swipe pads at shops' checkouts. Each user will be given a float to enable them to trade. Their float will be increased if their trading goes up and reduced if it falls below the level for which it was originally given. The more quid you earn, the more rapidly you spend them, and the more people you trade with the greater your float will be.

The introduction of a liquidity network to an area will break the link that exists at present between the level of economic activity that it is possible to carry on there and the amount of money that the community has borrowed or earned from outside. A liquidity network enables an area to:

Build its local economy by developing its local trading links. Many jobs could be created by meeting local needs with local skills and resources.

Lessen the burden of mortgage payments and other types of loan service. As the same amount of euros will still be coming into the area, the payments made in quid will be in addition to, rather than instead of, payments in euros. Since the quid can be used for local payments instead of euros, more euros will be available for payments for which only euros are acceptable. As a result, the level of bad debts and rates and loan arrears should decline in areas with liquidity networks.

Settle invoices more quickly. Because users are given a bigger float if quid move rapidly through their account, there is every incentive to settle accounts as quickly as possible.

Lower business costs. If a business is given part of its working capital as a float by its local trust rather than having to borrow it from its bank, it will save part of its interest costs.

Give local firms prepared to take payment in quid an advantage over outside firms which have no means of spending them.

We believe that thousands of jobs would be created around the country if complementary currency systems were set up which enabled people living in the same town or county to meet each other's needs without first having to get enough of an externally-created money together to enable them to pay each other. Continued

2. An article in the magazine Construct Ireland:

www.feasta.org/documents/liquidity_network/2010_LQN_CI_Scan.pdf

WHY IRISH TOWNS MAY BOOST TRADE WITH DEBTLESS ELECTRONIC CURRENCIES

With money leaving local economies across Ireland to service debt and significant drops in local authority revenues, towns such as Dundalk, Ennis and Kilkenny are investigating the possibility of bringing in electronic currencies to keep money circulating locally, as Richard Douthwaite reveals. Continued

Cookie_Monster · 06-06-2010 3:32pm

thats the dodgiest thing I've read in a long time.

I don't even see how boards is allowing them a platform to promote such scam. You give everyone free "money" to spend in a communtiy, who picks up the tab when it all goes tits up? All this will do is increase council debt when shut this down.

you are a business owner selling coffee in a local town. you sign up to this. customers and local suppliers pay you with this quid. so you have no money coming in. How do you pay non local suppliers, corporation tax, esb, water, insurance? all these companies will laugh at you trying to pay in quids. Banks will not loan to you and will insist you pay back loans as you have no money coming in and you become bankrupt in very short time. etc etc

I can't believe this is even legal to be honest

Slippers 2 · 06-06-2010 4:29pm

Cookie_Monster wrote: »

I don't even see how boards is allowing you a platform to promote such scam.

It's got nothing to do with me. I came across it and think it's a good stop-gap measure until we get the kind of reform that's in my signature. More power to them.

Cookie_Monster wrote: »

I can't believe this is even legal to be honest

There's an eight page legal opinion from Anthony M. Collins SC in the pdf that I just posted.

Victor · 06-06-2010 10:28pm

Slippers 2 wrote: »

It's got nothing to do with me.

You seem awfully zealous about it. Its almost shill-like the way you include the hyperlinks.

There's an eight page legal opinion from Anthony M. Collins SC in the pdf that I just posted.

See, that the type of thing a shill would know.

Cookie_Monster · 07-06-2010 11:46am

Victor wrote: »

You seem awfully zealous about it. Its almost shill-like the way you include the hyperlinks.
See, that the type of thing a shill would know.

ha ha, zing!

Slippers 2 · 07-06-2010 12:04pm

Victor wrote: »

You seem awfully zealous about it.

I bumped the thread to show that it's a serious proposal that is making progress, despite how it was perceived last year.

Victor wrote: »

Its almost shill-like the way you include the hyperlinks.

If I hadn't included the links there would have been no evidence.

Victor wrote: »

See, that the type of thing a shill would know.

Cookie Monster was tantamount to accusing me of doing something illegal when he called it a scam and said he couldn't believe it was legal. I wanted to say that it didn't appear that CM had even glanced at the pdf and that Feasta's doing everything above board. Also, if I didn't know it was in there it would mean that I had posted a link without looking at it which would be bad form.

Cookie_Monster · 07-06-2010 5:52pm

Slippers 2 wrote: »

Cookie Monster was tantamount to accusing me of doing something illegal when he called it a scam and said he couldn't believe it was legal. I wanted to say that it didn't appear that CM had even glanced at the pdf and that Feasta's doing everything above board..

Everything Anglo, Enron and Esat did was "legal" until the investigations proved otherwise. Forgive me if I don't believe what a random solicitor reckons.

thebman · 07-06-2010 6:24pm

I think its going to be far too open to abuse as the people involved won't have taught all the loopholes through.

I also think its not wise to start using non-Euro currency in parts of the country as it sends a bad signal about the Euro at a time when it is fragile.

This is a common problem across many parts of the monetary union at the moment and they will come up with a solution to the problem without ideas like this IMO.

Feasta's Liquidity Networks

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