Worgl Experiment: printing depreciating currency

[trendie]

Watched a TedX talk about economics and stuff.
Came across this one about the Worgl currency experiment in Austria in the 1930s.
Essentially, in order to kickstart some economic activity the mayor produced local currency that depreciated! What happened was that people worked, and rather than lose the value (1% per month), they spent it sooner than later, resulting in more work for others.
I found it quite fascinating.

TEDxBlackRockCity - Hollis Doherty - The Woergl Experiment and the Evolution of Money - YouTube

a bit more detail: (I'm sure you can find more comprehensive explanations if you google.)
The Wörgl Experiment: Austria (1932-1933) | Currency Solutions for a Wiser World

 

[counter_violent]

Already happening in Bristol and other places

Bristol Pound - Our City. Our Money
Bristol Pound - Our City. Our Money
http://bristolpound.org/video

This is what happens if you try that in the states
Bernard von NotHaus - Wikipedia, the free encyclopedia

Heres a couple of links to the Masters of Money series.
Bernard von NotHaus is featured in the second vid
BBC iPlayer - Masters of Money: Keynes
BBC iPlayer - Masters of Money: Hayek

 

[FringFX]

Thanks trendie, c_v. Fascinating indeed.

IIRC, BBC run a news feature about a local (Greek?) currency several months ago

 

[Pat494]

Talking about printing money, I seem to recall that Russia is second only to the USA in printing US dollar bills. All counterfeit but not really a problem outside of USA !

Both avid followers of Robert Mugabe's system !! He got right up to printing off $20 billion notes. and worthless. NOw that is economics African style.

 

[FringFX]

$20 billion notes? I want some of those for my collection

 

[natureboy]

Berkshares are in the states counter-violent. I'm also wanting to generate interest in silver backed notes here in the Bluegrass of KY. We need a backup currency over here for when USD goes into more severe inflation. popular support is lacking - man is a party animal, as long as things are going ok he's not going to plan for the possible future very well..

Bernard Lietaer also has interesting thoughts on local and competing currencies.

 

[natureboy]

Speaking of Mugabe, I have a 100 trillion dollar Zimbabwe note framed in my trading room. I'm collecting Pengo, Yugoslav, Weimar, and continental paper notes for a hyperinflation hobby..

 

[natureboy]

The deal with the liberty dollar was coinage. The constitution, not that it's being followed, says no private coinage, yet is silent on paper money. That's how the Fed was able to hoist itself into existence legally I think (as well as the us central banks b4 the fed).

 

[Pat494]

Speaking of Mugabe, I have a 100 trillion dollar Zimbabwe note framed in my trading room. I'm collecting Pengo, Yugoslav, Weimar, and continental paper notes for a hyperinflation hobby..

Phew didn't know they went that high ?

How about now ?

 

[natureboy]

no clue.. i saw an article where people were gluing it to walls for graffiti .. showing the money had become wallpaper.. i think the people are just using euros, usd, gbp

i'll post a picture tomorrow of that note

 

[Pat494]

How about this million US $ note I have. Don't know where it was printed.

The average New Yorker would kill for it I expect.

 

[natureboy]

oh yeah - you could trade that for the Z$ lol

 

[natureboy]

Here's that Zimbabwe note.. Relates to Worgl in that the instability in value in currencies like Z$ have happened other places..Yugoslavia, Hungary, Weimar Germany..or the deflationary 1930s. the consequent employment and manufacturing crises ... all were reversed just by having a stable currency. No inflation, no deflation, just what's needed for commerce. That's amazing that the Worgl Experiment could swiftly achieve stability in the face of worldwide economic depression

 

[Pat494]

View attachment 146686

Here's that Zimbabwe note.. Relates to Worgl in that the instability in value in currencies like Z$ have happened other places..Yugoslavia, Hungary, Weimar Germany..or the deflationary 1930s. the consequent employment and manufacturing crises ... all were reversed just by having a stable currency. No inflation, no deflation, just what's needed for commerce. That's amazing that the Worgl Experiment could swiftly achieve stability in the face of worldwide economic depression

could be worth a dollar or two in 50 years !

 

[dotcom]

i really like this story. I came up with an similar solution to this a month ago when i was studying the 08 crisis. Mine is a little more strategic and cultural and slowly builds to remove money. It would work we just need a building load of money to do it. We can always start small and move up very quickly.

 

[thunderstruck]

this only worked because a persons savings worked as a bank reserve creating "money" than no one would want to hold for a long period of money (ie you had no savings ) so it was spent immediately . in essense it was a barter systems that had a "currency" to facilitate business . No one could save this money as it had no exchange value . But if you could buy food with this money then it worked for the short term.

Hope the whole world hasn't beome a big scale Worgl Experiment

 

[new_trader]

Essentially, in order to kickstart some economic activity the mayor produced local currency that depreciated! What happened was that people worked, and rather than lose the value (1% per month), they spent it sooner than later, resulting in more work for others.

Only a modern economist or a Politician can believe and pursue this insidious, destructive economic policy which is no different to what we have today.

1) Slaves had jobs but they didn’t enjoy being forced to work so they could survive. Forcing someone to spend money before it loses value is no different.

2) Politicians don’t make any distinction between jobs. They just want a person to be employed which means they don’t consider if societies scarce resources are being used efficiently.

3) Money should gain value which is the reward for productivity. Less work but more purchasing power.

4) Money shouldn’t be a political tool created by the Political class. It should be a product of the free market.

5) When money holds or gains value it allows people to save. This means they are either over producing (which benefits all of society) or deferring consumption. The savings are made available to entrepreneurs who want to borrow to invest in new business ventures. New business ventures create new products and possibly more employment which benefit all of society.

 

[Pat494]

I can just see Bernanke depreciating the dollar by maybe 100 *s to escape from the $16 trillion debt their idiot politicians have lumbered them with !!

 

[NVP]

Thanks trendie, c_v. Fascinating indeed.

IIRC, BBC run a news feature about a local (Greek?) currency several months ago

nah..........a greek currency will never catch on ..hahahaha