THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

Bottom line: it is a successful model with very low start-up costs,
and it works. However, it has one drawback common to all fiat
currencies: Ithaca HOURS require someone to decide centrally how
much currency to issue. While this is done in a democratic way by
the 'Ithaca Reserve Board', all i central bankers will confirm that
managing a fiat currency supply remains a tricky decision. The
biggest risk is that if more currency is issued than people want to use,
there will be inflation and devaluation of the complementary
currency. This will not happen as long as Ithaca HOUR managers
follow Paul Glover's and his colleagues' lead in remaining wisely
conservative in their money supply decisions. But this risk precludes
me from recommending this approach for general use.
3. The PEN Exchange
Olaf Egeberg lives in Takoma Park, Maryland, on the borders of
Washington DC, where the US Treasury and the Federal Reserve
headquarters are located. After he retired, he wanted to give
something back to his community. 'In this day and age, we lose sight
of the most valuable resources: each other. We can have a walkingdistance
society right here, where we already are. I think
neighbourhoods are the most important society for us to build now,
was his reasoning.
In contrast with Ithaca, this is a decidedly middle-class community
with a very low unemployment level (about 1%). Olaf decided to
define his neighbourhood as all families within five minutes' walking
distance from the centre of town, roughly 450 families in total. Hence
the name 'Philadelphia-Easter Neighbourhood' (PEN for short) for
the streets at the limit of these blocks.
He sent out 50 letters, describing how the PEN Exchange would
contribute to 'building a more supportive society for us here. There's