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

· The system would automatically tend to counteract the prevailing
business cycle. It would tend to activate the economy when the
business cycle worsens, and dampen inflationary tendencies when a
boom prevails (see box on 'Economic tech talk' for details).
· But the most important reason for our purposes here is that the
sustainability fee is 'naturally' embedded in the money system. It
therefore guarantees the full integration of the proposed currency in
the existing market system of the 'real' economy in all its aspects.
There are indeed real costs associated with storing commodities,
and the sustainability Fee would simply be the cost of storing the
basket of commodities agreed upon. These storage costs (and
therefore the sustainability fees) have been estimated in a detailed
study for a Commodity Reserve Currency at 3 to 3.5% per annum.
Note that these costs are not new additional costs to the economy as
a whole. They are indeed already factored in the current economy.
What is proposed is simply transferring these existing costs to the
bearer of the Terra, thereby giving them the useful social function of
a sustainability fee.
Economic tech talk
Economic textbooks define money in terms of its functions, me
three most important of which are: Standard of Value, Medium of
Exchange and Store of Value (definitions in Appendix A).
Since 1971, there has been no international standard of value in this
sense, a GAC simply restores that function far those who choose to
use it as a contractual currency.
The role of medium of exchange would be played by either the
GRC or conventional national currencies at the choice of me parties -