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How to save your money, your family, yourself and maybe the world in the troubled times to come. It cannot be done by hiding in the woods but by working and trading with the people around you.


We will organize this in main parts as follows:

1) What might happen and has happened in history.

2) How to prepare your family and yourself for the worst.

3) How to build a support group among your neighbors and your community.

4) How to plan a way to make your immediate area immune from the forces of deflation or hyper-inflation which will run their courses in the times of troubles.

5) Freemoney

6) Freemoney introduced?

7) Some basic facts about money.

8) What will happen?

9) Outlook of hope for a better future.

10) Blueprint

11) Graphic of first V80

12) Selected other V80

13) How to start V80

14) Remarks



1) What might happen and has happened in history?

It is quite clear that everything that has happened in history to destroy former civilizations has had economic causes. They are not really well known or following civilizations would have avoided them and they are not known now and therefore are bound to come into play again.

We will not go into details about possible causes or remedies which were tried before and failed or what should be done. This is a senseless exercise in something which one cannot do much about anyway, but if we help ourselves our example might show others what can be done.

We do not have the power to change most of what will happen. We cannot avoid inflation bcause it is already a done deal and only still hidden. We cannot avoid a stock market crash. It is already not avoidable any more. The speculative bubble might still become bigger but bust it must.

We know that in history all former civilizations collapsed of causes then not known and which now are only guessed without certainty. It looks as if we are barely ahead of such a collapse. It might still take some time and it could happen fast and in the near future.

Whether it will be a slow withering away or lightning fast in a catastrophic crash or a war is also everybody’s guess but even the withering away will gain speed.

Prudent people should therefore be prepared at all times.

We will cut this chapter short, because dwelling in the past does not give us much help in the future, if we do not really find out what went wrong then and have no power to change anything now, if we do find out.

It would be an exercise in futility.

What we can do, is preparing ourselfes and our surroundings for bad times, because just like the inflation and the stockmarket crash and even if that is only a Salami crash - they will come. The ever expanding debts will leave no choice but an inflation which makes them worthless together with the monetary assets. Monetary reform afterwards will necessarily then cause deflation.

You picked up the wrong booklet if you were looking for something which tells you how to survive in the woods in a world which turned hostile. This little work has nothing like that between its covers. It will only tell you how to help keeping civilisation going and where to look for safety. It will be among productive people like ones as you hopefully will be one, who will help each other by trading with each other.





2) How to prepare your family and yourself for the worst.

This is going to be a very important chapter and it has mainly to do with money and because there are two ways in which money can be a destructive force we must consider both. Deflation or hyper-inflation.

Let us take inflation first. Most people now have lived with it for all of their life and as long as it is moderate have found ways to deal with it so it is actually only high inflation we must consider. Here we have the example of the people who lived through such inflations and the way to deal with them. It is fairly simple and straight forward. Buy real assets or exchange your money into one without or with less inflation - and if it comes to the worst - leave this country if you have a chance.

So far have since the world war II only single countries have had severe inflations and therefor this policy worked for many people. Some of them were not so lucky when the disruptive forces of inflation destroyed their country but all in all mankind survived.

This may sound cold-hearted, seeing all the suffering in the world but as long as there is a system in place where some people can without working take the fruits of the labor of others nothing will change.

One problem arises though. What if such an inflation becomes world-wide and involves a mayor currency like Dollar or Euro? Then one cannot close his eyes any longer and should prepare more thoroughly for his own security. Real assets and real stockpiling of not perishable goods are still fine but it will be prudent not to overdo it because in such a scenario civic unrest and even civil war are a real possibility.

Northamericans might think that unthinkable unless they are survivalists but people in the rest of the world know better.

One might be driven off his property as has happened often in such situations and get robbed for ones stocks. Much more safety is then in frugality and knowledge and ability to produce the basic necessities of life. Even robbers need people like that and might spare them. If the robbers have the power in a state one can always feed himself first and survive with such knowledge and ability. To teach them to ones family and offspring is the best one can do for them. It is easier for them to learn them beforehand. Later it might be too late.

Because these abilities and knowledge are also of utmost usefulness in a deflation one should consider them the number one survival technique.

But let us stay with inflation for a while. Money in the bank and monetary assets are then, off course, of no use and should be used to buy real assets and - which might surprise some - pay back all debts one might have on real assets. The reason for that is, that as long as law and order still function, the creditors will try by hook and crook to get their money in order to convert it into real stuff also, when they notice that inflation is taking off. When they force you into bankruptcy and can pick up your real assets then very cheap they would not mind.

Now to gold and silver, the traditional inflation hedge. They are grossly over rated and should never be used instead of paying back debts or even occurring some to hold them. They are fine in a limited amount as long as they are considered by most people as valuable. Mainly as an easily transportable asset if one has to flee. Real necessities of life will in times of high inflation always be more valuable. The value of gold and silver depends also on the chance that they might became monetary standards once again which is questionable. In former times this was never even questioned and everybody wanted to get back to a gold standard as fast as possible after they were forced to abandon it. There were at the most a few years without one while we have now officially none since 30 years and in practice none since 60 years. A real gold currency is still farther back and even then fractional banking had watered it down.

The relationship between available gold and monetary assets is way out of the normal just as is the relationship of other goods to money and it is only a question of time until the holders of the monetary assets will realize that there is not much what their money could buy. Then all prices will rise and it is questionable which prises will rise the most. If the price of gold rises more than other prices, it will make it completely impossible to return to a gold standard, which some people think it still possible.

This covers more or less what one can do for himself and his family in case of inflation and there is only one more thing to say about the probability of such an inflation. It is very high. The reason for that is that in years past a gigantic overhang of monetary assets has developed for which no real wares are on the market. It only seems so, because the owners of these assets are not on the market for goods. So they stay there as so called over production on the market and this is the reason for the stagflation the world is suffering under.

Now let us consider deflation. As we said before, frugality and knowledge and ability to produce the necessities of life are of even greater value during a deflation. In a deflation the medium of exchange goes into hiding and jobs disappear and therefore no money can be earned for the necessities of life. The one able to provide them for his family and himself will survive and the one who cannot will be forced to beg or steal. The time of the great depression is beyond the memory of most people living today and hardly anybody can imagine how it was and will be if such a depression will occur again and while it might not be as severe this time, mainly because this time there will be less reluctance for replacing the disappeared medium of exchange, it could be bad enough.

Because of the long lasting stagflation it is very hard to re-start the economy with small doses of additional money as Japan between 1900 and 2000 showed us. The only solution would be to get the money moving that is already there, not introduce new money. If done massively, inflation will rear its ugly head again. So there is not much choice. Japan did not have a deflation at that time. Only dis-inflation, which means a reduction of the inflation rate only. This brought 10 years of stagnation and bankruptcies no end. Not something to look forward to. And not very much one and ones family can do about it either.

One basic move still is advisable. It is really a move. One should move out of big cities if at all possible and move to small towns and villages. It is much safer. This should not be done at the last moment - one should have time to become friends with the neighbors.

Such a move will have benefits in both cases, inflation and deflation . During inflation one would be closer to the real necessities of life and during deflation also as well as being out of the way of civil unrest.

Now we might note down a few skills and knowledge which will make one a person with useful and searched for abilities in either case. It has mainly to do with basic needs. Food and shelter. Everyone who can provide food is, of course, very much in demand. Farmers, gardeners, hunters, fishers, beekeepers, shepherds as the basic providers as well as food preparers like butchers, bakers, cooks, beer and wine-makers and similar trades.

The second biggest basic need, shelter, has also a lot of trades and skills which are useful and everybody can surely think of some and here also basic providers and on the other hand people with the necessary skills and knowledge for the upkeep are both needed.

Last, but not least is there health-care and security, if only the old-fashioned way. Midwifery and sheriffs.

Traders might also be able to make a living but many others lacking basic skills and being cought in congested areas, where without daily transportation of all necessities of live survival is impossible, will find it hard. Plundering of existing stores and warehouses will not help for long. But let us not be all gloom and doom. We found that while one can do something to survive, it is really not a good solution but we are not at the end - it is only the end of the second chapter. Smile.





3) How to build a support group among your neighbors and the community.

We found out that it is possible for a while to survive the worst and when we not mentioned the very worst survival nightmares among neo-savages so is the reason for it that it should be possible to build and maintain support groups of people who will keep trade beneficial to both parties in a deal going and with that a measurement of civilization. How can that be done and should be done before civilization begins to deteriorate?

A lot gets done already in that direction all over the world but as long as most currencies in the world work with moderate inflation somewhat satisfactory as mediums of exchange these self-help groups do not amount to much in the over all economy. They are fine and useful to teach basic skills and inter dependence but without a stable money of their own they cannot bring about a lasting solution. In countries with more severe inflation instead of starting a stable local money foreign money like Dollar or DM were used, which were more stable. Sometimes those countries collapsed as did their economy and their money.

Book-keeping schemes never work satisfactory and cannot replace money as medium of exchange. At this point in time there are only two projects which are moderately successful. The Ithaka hours and the Creditos. Both are bound to the national money without an exchange rate.

There is not all that much we can learn from them. There is more we can learn mainly from one successful monetary experiment during the great depression, because this was the only one where they kept half decent records. It was in Woergl Austria.

We will not go into details about it here. A short explanation will follow. It is enough do say that it worked and had replaced the disappeared Austrian money locally as medium of exchange. Exactly the same can be done again and there were even some improvements made to this system.

Now, something like this need only be done if there are more people involved as a very small support group. Small groups can do their trades solely by straight barter and there is something like it going on all the time anyway. It should only be intensified in preparation for a more pressing need for it later on. A handyman will never need to go hungry but he must find customers. The problem is that a customer might have nothing to trade what he needs. There is also the problem of finding a fair price without a standard. Even only three way trades become difficult without prices. The only way this can somewhat be helped is by being self-sufficient and trade only surplus, but this is a far way back in history and the necessary skills for it are all but lost and our earth has become too crowded for it.

There is not a single person now in all of North-America who could do a fair five-way trade without money of some kind.

So even now those barter groups work only when they have a still working other money to have some judgement of the value of the goods they exchange among themselves. An Ithaka hour is ten Dollars and a Credito is a Peso and this, sorry to say, will eventually be their downfall.

The problem with disappearing money during a deflation and worthless money in an inflation which both do not work as medium of exchange must therefore be solved even in a small local market if there should be a market at all.

We see that even small support groups need some kind of medium of exchange or there will be no market whether local nor otherwise and even support will be hampered. If we want to survive and if we want trade, a market and some remnant of civilization to survive, we must look into the matter of local money.

One historic example for it will have to looked into carefully because it is the only one where records were kept and which lasted long enough, to let us come to some conclusions.

What can be learned from the miracle of Woergl - Silvio

Gesell’s miracle?

During the time of the great depression 1930 to 1935 there were quite a few - mainly faulty -monetary experiments to overcome it. All the ones which used the high from Irving Fisher proposed demurrage of 104% a year failed right away out of the simple reason that there are always two people involved in a deal and both must believe that they get a good deal. In the case of Fisher’s stamp script the receiver of such a money got a bad deal and therefore refrained from it. This happened to all North American experiments.

With Waera in Germany which found a focal point in Schwanenkirchen and with the money of Woergl it was different. The relatively small demurrage of 12% in a year ( 1% every month) did not prevent the not-coerced acceptance of this money even if we know now that half of that amount would also be sufficient and would allow an even easier acceptance.

Waera was started by eleven people in a widely spread market and only really took of when it found a local market in Schwanenkirchen. There were only sketchy records kept and therefore we will concentrate on Woergl where such records were kept.

The experiment of Woergl was started by printing 32,000 Schilling worth of alternative money but this amount was never used. They started by using only 1000 Schilling worth, had at most about 7,500 Schilling in circulation and used an average 5,293 Schillings which resulted in a total demurrage cost for the 14 months the experiment lasted of 740 Schillings. There was a local market of about 5000 people involved.

The surprising result of 3 Millions worth of trade done with the small amount of money involved can only be explained by the faster average turnover of the FULL amount of this money. It changed hands nearly twice every day (around 500 times a year) compared to an average turnover of money without demurrage of 20 times a year. (Less in times of deflation). This fact must be taken into consideration by anybody who will start such an experiment again if deflation makes the other money not-useable. It also makes it much easier to do so because there should be no difficulty to issue and back such a minimal amount of alternative money. (About one Schilling or one Dollar worth for every participant in the market - remember, in Woergl it was 5,292 for about 5,000 people). The amount can easily later be increased if necessary.

This was lesson two, after we learned already that 104% demurrage does not work and 0% does not work either and that 12% worked and as a guess 5% would work even better.

Now to lesson three.

The money in Woergl worked so marvelously that the example seen by the people all around made them eager to join. It is a fact that 40 times as many people as the original 5,000 were ready to join after a year and only the force of law prevented them. What can we learn from this?

In Woergl the spread of this money would have been 40 times within a year and there is no reason why it should be different now. From the original 5,000 people it would have been 200,000 or 0.2 Millions and in another year by continuation of the trend - and again there is no reason why it would not continue - it would have been 8 Millions. More than all of Austria..

The funny thing is, that these numbers of Woergl are known for more than sixty years and nobody saw the significance of them, just as nobody saw how minimal the amount of demurrage was, when put into relation to the trades done with this money.

Maybe now people might start to think about it some more and realize that this money could in a very short time replace the other currency. In fact, in such a short time that the slowly moving other money (we know the relation - about 10 to 500 in times of deflation) could not even react

There is only somebody who will react. It is the owners of the huge amounts of money which will become worthless in a very short time. They will react as they did against the money of Woergl. They will try to have the government pulling their chestnuts out of the fire by using force against Freemoney. This has to be taken into consideration by anybody who starts such a for them dangerous money against which they have no other means of defense.

Therefore means have to be found to keep such a money going for at least two years. By then it will be unstoppable. It is sure that now, when we know how short the time is, that has to be bridged that such means will be found. They do not need to be much more as the means that are used by illegal currency trade and a black market for services and goods and it is not necessary to go into details for that here.

As long as the rulers of money also rule the government this would only be justified self-defense.


We have seen now how little alternative money is needed if it has demurrage and how fast it will spread and replace the other money, but we have not looked into the mistakes which were made in Woergl. Actually it was only one. The money’s stability was not guaranteed and therefor no exchange rate was used. This was a mistake which would have caused inflation if the money would have spread and taken over more of the trades not only locally. Then it would have been to late.

It would have ended the depression and by that would have removed the main cause of the war but at the cost of inflation.

Now we know how fast such a money could spread and the estimate of the people who wanted to join is very low. It could have been considerably more. Therefore, even if it might be a little more difficult to do an exchange rate and the guarantied stable purchasing value of this money it must be introduced right at the start.

Having done that one can sit back and let things develop. The money is divorced from the old one and what will happen to it is of no concern to the stable new money.

But what will happen? With the spread of the money with demurrage and we have seen how fast that could be the other money will become useless and that means worthless. Do not let us kid about that. It is only seemingly worth something now and the belief that it is worth something lies in the fact that only a very minute amount of it is actually used to buy things with it. If every owner of money would decide to buy something with it the illusion would soon be realized and the last ones to realize it would lose the most.

With the introduction of stable demurraged money the illusion might be seen a little bit faster. That is all.

Many people in the world found out about the illusion when hyper-inflation hit their country and they had not a safety net like our new demurraged money in place. Will we have it in time?

Let us hope it and prepare for the unavoidable time when the currency system of the world collapses. We have seen how it can be done in Woergl and if we can avoid the mistakes which were made there and even much more severe in other such experiments, we might have a chance to overcome the next depression very fast.

How fast? Figure it out yourself. All the necessary information for the calculation is right here in this essay. Spreading 40 times the size of the original market each year will have the whole world using Freemoney within five years. That is, if no other original markets get startet in the meantime. Then it will be faster. Maybe much faster.





4) How to plan to make your immediate area immune from the forces of deflation or hyper-inflation, which will happen in the time of troubles.

Inflation probably first and deflation later will happen and because the state will not bring the solution to these problems (the state is the problem) we will have to use local and regional means to divorce our local medium of exchange from the one of the state. This is not overly difficult and is simply done by an exchange rate. Actually this is all. Very simple!

We learned what can be done and should be done but to find people to do it and do it right will not be a simple matter. They will not be motivated even to learn about those things unless their economic situation gets much worse and as long as the money of today still works after a fashion they will see no need for change. Let us hope that the people who do are then in a position to do something and start stable money with demurrage.

Off course, the devil is in the detail and exchange rates have to be established and published and a local exchange office in banks will need to be organized and enough funds must be kept to do the exchanging. Depending on the size of trade outside the immediate area and / or affiliated areas which might use the same local means of exchange this could be very little during the first worst time of troubles.

For most people this first time will not be the worst, because they will be stocked up and in the beginning of runaway inflation money will still buy something and they will probably still be stocked up when currency reform will bring the beginning of deflation. This might not be such a good thing, because they might think, that things will blow over and do nothing about it and maybe even resist any change until the people most hurting will revolt. It might be too late then because in the middle of civil war there is no more room for production and peaceful trade.

Now we know that we need a local money which is not tied to the states money if we want to keep the local economy running. We also know that we should not wait too long with introducing it. What else do we need to know?

1) How should this money look like?

2) How much should it be worth?

3) How do we keep it at a stable purchasing power?

4) How do we keep it in circulation?

5) How do we measure the purchasing value?

6) How much of this money do we need?

7) How do we set the exchange rate?

These are the seven questions that have to be answered.

Let us do it.

1) Like any other money, but with an expire date.

2) It does not really matter as long as it keeps this value, although it is deemed appropriate to start with the value of the states money 20 years ago 1980.

3) By keeping the exchange rate at exactly the level showing this.

4) By exchanging it on the expire date and charging for renewal 5% of the value of the bill.

5) By the cost of living index.

6) About 2 Dollars worth for every user.

7) By the difference in purchasing power.

There are a few more questions , that might be asked and the answers to them:

Is somebody forced to accept this secondary currency? Answer: No.

Can it be freely exchanged? Answer: Yes, but the renewal fee will apply and just as today between different currencies there will be a nominal difference between buying and selling.

Is this local money legal? Answer: Yes, as long as it does not look like the states money.

Who is going to issue this money? Answer: It does not really matter as long as it is a responsible agency, which can guarantee its value. Probably a local bank, or a merchant (better a group of merchants) or the city. In a town of 10,000 it will be only 20,000 Dollars worth. That should be no problem.

Why was something like this not done long ago? Answer: There was no deflation since before the worldwar and the idea is not widely known and as long as the other money is kept in circulation by light inflation there is no pressing need for it.

Will there be such a money in the near future? Answer: Yes, because a way was found to introduce it by a small group of local merchants.





5) Freemoney introduced?


A short while ago something happened which will have far-reaching consequences for the whole world and nobody took much notice. In Germany Freemoney was introduced.

You might ask. What is Freemoney? Freemoney was the name Silvio Gesell gave his proposed money, which later Irving Fisher gave the name of stamp script and tried, sorely with a much to high demurrage, to propagate during the great depression.

It is a money with a stable purchasing power and as such a real measurement of value and not a plaything of inflation and deflation as our money today is. This aspect of it gets downplayed in most discussions, because it is much more fun to make jokes about the demurrage..

So, what did the Germans now really do? All they did was to put on some web-sites a exchange rate for a stable money, they called V 80. It has the purchasing power of the German Mark of 1980 and there is a graphic which shows by way of explanation how the exchange rate shows the devaluation of the German Mark since then and they promise to do that in the times coming, publishing further exchange rates.

Thereby they have created a stable currency unit. In short Freemoney. So far it is only a reference currency and nobody is forced to use it and there is no real cash of it on the market. There is also no power of the law behind it, only the good will of the people who use it in their dealings. Only people who are tired of working with a money which is always cheating one partner of a deal in a longer time frame by changing its purchasing power as our money now does. In short, honest people are using it, who do not want to take advantage of paying less by favor of inflation or on the other hand are cheated by getting less.

It is hoped that more and more people will use it in dealings with a longer time frame and if the other money should lose its function either through deflation or high inflation the introduction of real cash in „V 80" nomination is also planed. V80 (value 1980) for other currencies were also figured out, among them US and Can$.

Why did they introduce this money now?

The reason for that, I was told, is the fact that they think that sooner or later a collapse of the currency system is unavoidable and some kind of safety net must be in place for that and it is much simpler to introduce cash for an already accepted and known currency if the need arises as starting from scratch in a possibly very stressful time.

So it does not seem to matter much to them, how many people are using this „Freemoney" at the present time. They have the future in mind and they seem to think that it is a near future.

Right now with the change over to Euro there seems to be some holdup but let us hope that with a surely unstable Euro this virtual money will continue.




6) Freemoney, the original Social Credit money reborn?

The introduction of a stable reference currency in Germany should give Canadians the idea to do the same. There is nothing to it. All that has to be done is following the lead of what the Germans have done. Take a year in the past and it might as well be 1980 and take the value of the Canadian Dollar at the end of this year, measured by the consumer price index as its value and give it a name like Credit, maybe G.Credit or Valor or whatever. We use V80 Can$ in the meantime for value 1980.

Then figure out the exchange rate and publish it on an ongoing basis. That’s all.

Nobody will be forced to use this currency and in fact it is nothing but a simpler way of what has been done by using the consumer price index for wages or pensions for a long time. It will be up to the two people involved in a longer term deal, whether they are going to use it or not.

There is only the fact that if this currency is used, that both will know that this is a honest deal and nobody wants to gain by paying later with a devalued currency. Therefore people, who would not be willing to use it might be shunned and people who will oppose such a simple thing might be considered potential cheaters who will rather continue with a currency which has no honest value and no way to know. With this reference currency everybody will know.

I trust that Canadians do not want to be shamed by the Germans and I even believe that Canadians will be more liable to use such a honest measurement. Businessmen might even use it on their price tags to show that their prices stay the same and it is only this cheating Dollar which makes the prices go up.

There is also no reason against starting this currency locally. Especially tourist destinations will gain by it. Tourist will flock into towns where obviously honest people live.

You might think this is nothing but a cost of living index and in a sense it is. The only thing is that it shows by its exchange rate much better which way the other money went and where it is heading and it is much simpler to use. Therefore it can be used for day to day purposes like the prices for merchandise.

Especially in a inflatory environment it will make it not necessary to change price tags frequently and it would be an even better standard as the more stable DM and Dollars are now in countries with such not stable currencies. And, of course, we never know, if Dollar and Euro ( the DM replacement) will not become more unstable also one of these days.

The fact is that both currencies never were stable and the Dollar lost 90% of its value in the last 50 years and the DM 80%. Other currencies did much worse and sometimes in a few years lost most of their value. The little town of Woergl not only kept the value of their local money stable but even increased its value because they did not have an exchange rate to the government money and this gained because of deflation at that time about 7% in value during the time of the experiment.

A stable local second currency can be the solution in both cases when the money of the state causes economic problems. In case of deflation when money disappears from the market local money can fill the void as it did in Woergl. In case of a heated up inflation when goods will leave the market and the disruption of trade starts from this end local money especially when it got established during a time when money had disappeared and had proven its merit will also replace more and more of the steadily more worthless becoming state’s money. It is not a question if there will be a speeding up of inflation in the future for Dollar and Euro and Yen also - it is only a question when. There is already a huge overhang of money in accounts all over the world, which can easily be seen when one compares numbers. What if people would cash them out in any significant amount? There is not even 10% of the necessary cash for that in circulation.

It will be no problem at all to keep any local money stable by the simple act of the issuing agency to buy and sell it at the exchange rate which shows the difference in value. A very simple thing to do. A thing that countries now could also do if the would not try to hold the exchange rate against a wrong purchasing value parity. The local money will not fall into this trap and they would not dare to over-issue, because then it would be difficult to guarantee the stable purchasing value. The only reason that governments and their National banks are not able to do it is the fact that with the money as we have now it is not possible to control the amount of money in circulation. The money held as store of value however temporarily is not in circulation and an average speed of turnover of 20 times a year is considered normal.

Nobody seems to see that the normal speed should be about 30 times as fast.


7) Some basic facts about money.

Economic science gives money three attributes:

Money is 1) a medium of exchange and payment and it makes possible an extension of a simple two way barter in time and space. With general acceptance it also makes it possible that it becomes 2) a standard of measurement. Everybody can see what it will buy by a simple look at some price tags. When he exchanges some service or some product for money which means when he sells something for money he usually knows quite well what he in turn can get for this money. It is only in longer time frames and deals with such that a change of value in the medium they are written out will cause troubles.

The third attribute 3) is that money is also a medium to store value and here we have the sorry spectacle that economic science hardly looked at the fact that this has some problems which are in the simple fact that money cannot be both at the same time. Medium of exchange and medium for storing value.

It is basically the story of the impossibility of having your cake and eating it. Since beginning of a market economy with money the problem was solved for very short times always by replacing the missing medium of exchange by new money. This did not cause inflation because the money used as store of value was by this fact not on the market. It was not buying anything. Only when the stored money came back on the market it did cause inflation.

In former times, when gold or silver solely were used as money there was not so much leeway with replacing possible and therefor inflations were not such a problem as they are now but even the there were some caused by debasement of coin. More problems were caused by the necessity of deflation to go back to a previous gold standard if for any reason like using too much cheaper metal in the coins or using money surrogates inflation had „happened".

Now with paper money and even transfer of money accounts used as money the amount of money on the market can easily be increased and this was done to such an extent that to decrease it to a former level is now impossible. Even only trying to reduce the amount of inflation below 3% will cause severe economic problems.

To continue with inflation has run into other problems. The money in the accounts and 95% of all cash which is used as store of value if only for short times can go on the market at any time if its continuing value becomes doubtful. As long as it only pushes the prices on the stock-market up, nobody minds and people believe that they get rich by owning such stocks. Nobody realizes that it is a similar illusion as with paper money. The stocks are only worth so much when nobody sells them. The same goes for money. It is only worth something if people do not try to buy something with it except stocks where the resulting rise in their prices makes everybody happy. Buying real goods would make a lot of people very unhappy when they see the prices of the necessities of life go up.

During a deflation the over all amount of money need not to be changed to push the price lewel downwards. It is enough if more money stays away from the market. Once we realize that even in the best of times 95% of the money is more or less idle and it needs only 2 1/2% more to bring half of all trades to a stall. The money is still there, only less of the already small amount that moves in normal times as payment for goods do so. The money is there and so are the accounts but nothing moves.

Nobody seems to think that something is amiss when money changes on the average hands only 20 times during a year and maybe 10 times or less during a deflation. The only time money moves at high speed is in a time of high inflation and then it is the goods which do the disappearing act from the market, which in times of deflation the money does.

All the money which still is there (but not in circulation in the market) makes it extremely hazardous to fight deflation with additional money. This might get the idle money back on the market which would mean inflation. So far the velocity control of money was not even an item in economic science and therefor science has no answers to the problem. Without velocity control there can be no stable currency and the money will always be going one way or the other. Inflation or deflation.

The answer to the problem will probably only be found when a local money shows that it can be done. Such a local money which showed at least some answers against deflation and which was also kept more than stable existed 1932 in Woergl. The few economists who took notice of it, like Irving Fisher, did not really understand the principle of the money which was used there and could therefor not follow the example. Since then deflation was prevented and therefor no disappearance of money happened and this meant - no free space for alternative money. In countries with high inflation there were always relative stable currencies available like Dollar or DM which were used instead of alternative local money. Only now, when these currencies (the Euro for the DM) are also endangered local money will get a chance.

We see now, what nobody seems to have seen since money began that only about 5% of the existing money is used as medium of exchange while even under moderate inflation 95% are used as store of value for shorter or longer time. Nobody seems to have noticed what it means that the average turnover of money is only at the most 20 times a year. They see that the moment they spend it in a store the storeowner brings it in his bank to pay his bills and from there it is gone the same day to other users. An average turnover of twice a day would be no excessive speed. 700 times a year! Where is the money the other 680 times if a „normal" turnover is 20 times? Do our economist put their common sense in storage when the enter the universities? Why was nobody asking this question?

Money must have the ability of a store of value to act as a time expansion of two way barter, but it should not be a better store of value as the wares are, which are traded with its help. It will otherwise demand compensation (called interest) to allow its usage.

This is okay as long as there are ways to pay it and as long as that is possible and such a money is generally accepted, it has the beneficial result of making trade and economic division of labor possible and with that civilisation.

In times of deflation money gains value and is therfore an even better store of value and is then used as such to an higher extent and if even only 1% more is used in this way 1/5 of all the usually circulating money is missing in action on the market. More wares and services stay unsold and if this continues even civilisation crumbles.

Only in times of very high inflation does it lose the ability as store of value and then the wares are a better store of value and are then used as such. They dissappear from the market then and are held back. Nobody is even interested to produce any, when the only compensation he gets is worthless money which becomes still more wortless until one can exchange it for other wares again. This also makes civilisation crumble.

Such a money can, of course, never be a standard of measure if its value is consistently changing and on both ends of the business cycles it loses also the ability as medium of exchange.



8) What will happen?

Many people believe that inflation and even a speed up of inflation is not avoidable and they are right as we have shown. There is simply too much money around and if more people want to buy something besides stocks for it the prices of those goods are bound to go up. More money on the market is inflation just as less money is deflation. The magic word here is the market. Money which is not on the market does not count. Might go on the market means nothing. The mass psychology that comes into play with inflation is a loss of confidence in the continuing value of the money and then people begin to buy. By buying they raise prices and now they have proven that the money continues to become worth less and they stampede. We know that there was 95% more or less idle money around and ten times as many accounts which can also be exchanged for money and there is no way any government or any banks can get the debtors for these accounts fast enough to pay up. They have to print additional money and that makes matters worse.

In the end only a monetary reform can help to make a fresh start. Some people believe that gold or silver will have a role to play then. It might or might not be but it does not matter. Germany for instance ended the inflation 1923 without it and only later went back to a gold standard. A gold standard will help to end inflation but at the cost of deflation. Here again mass psychology plays havoc which the proponents of the gold standard cannot or do not want to see. People will gladly take gold or gold-backed money as payment for their goods and services but they will be reluctant to part with it if they do not need to do so for pressing needs.

Therefore part of the money does not return to the market and some goods or services cannot be sold. Prices go down and everybody holds back more money and in fact must hold back more money because business is slowing down and he cannot be sure to be able to sell his goods or services. In other words money goes into hiding.

This is the eternal boom and bust cycle of economy and nobody has been able to change it. One can replace the missing money on the market but this money is only missing on the market, it is still in existence and if its owners realize what is done they go back on the market with it and then new and old money compete for goods and inflation is back. People and also polititians forget that the money only disappeared from the market and now there is still this idle money and the accounts around and might bounce back.

What will happen if a new player is introduced into the market. Local stable money with an exchange rate and demurrage of 5 or 6%? Quite simple. This money will take some of the goods and services from the market instead of the missing money. The more widespread such local money is the more goods will be taken of the market. The old money, if it now comes back on the market finds less goods instead of the more it expected, when it went into hiding to wait for cheaper prices. Less goods and more money now means slight inflation and now people might hold back the stable local money were it not for the demurrage. Both moneys now have a more or less level competition for goods but both together are too much money for not enough goods and we know what that means. The prices go up, but now exchange rate and guarantee of stability comes into play for the local money. The result is that inflation hits only the old money with doubled force. What about the gold, you ask? Since the old money is presumably on a gold standard, which means a fixed gold price, gold loses just as much on value as the money does.

The local money is not affected by either price. For it the price of gold is a price like any other and if the old money gets cheaper on the exchange rate so does gold. Therefor people will keep their gold in the hope, that it will later be worth more again. This also will make no difference to the local stable money. Its stability is not dependent on gold and the price of gold whether this price is fixed or a market price. As long as the state does not force it on people as the sole medium of exchange and forbids all other, it can be used as store of value by everybody who want to use it this way.

Would the demurrage not be a hindrance for the local money to be accepted, you ask? Yes, it would be if other money is still on the market and therefor it should be as little as necessary, if the other money comes back.

The 104% which Irving Fisher proposed never worked, but the 6% a year would make hardly a difference for somebody who would use it. It would only make a difference for somebody who would want to hoard it and for somebody who might not get as much interest as he got before on the old money, but this is easily offset by the guaranteed stability of the local money. One might not get so much interest but he will get after years still a money back which has the same value.




9)Outlook into a better future.

We are on the end of our strategy of survival and it turned out to be a bit different from other survivalist strategies because we saw in other people not enemies to our survival but possible helpmates.

The life of a sole survivor in a nuclear wasteland hunted and robbed by other survivors is not a fate to work for. It is much more preferable to find a way to keep society working. No man is an island and for long term survival not even a family is enough. A gene-pool is needed and people of different skills to trade with. Our way is the better way.

It should be a workable strategy and it better be because the other ones only lead to a life not worth living and sure extinction while this one would lead to one, which never before was possible - a life of abundance and peace.

Working at what everyone can do best and trading with an honest money will show that people are basically honest, if they get the chance to be. Dishonest people will soon find nobody to trade with and who ever thinks, that he can force people to use dishonest money again, as was done since the beginning of money in history when there is honest money available, will be mistaken.

It is the usury caused by this dishonest money which brings the boom and bust cycles which plagued mankind for ever. Honest money will end all of that.

Honest money is an idea well worth working and living for and blessed is the man who finds it.




10) The blueprint for local Freemoney.

One could read all the writings of Silvio Gesell about the money with a charge for idleness levied on it which he called Freemoney without finding anything but clues about how to introduce it locally and without the state. All his life he only tried to explain his findings to the politicians and economists of his time.

As we know now it was with little success and only Irving Fisher and Maynard Keynes took any notice. Even they did this only after successful experiments (Wära and Wörgl) showed the soundness of Gesells ideas.

Now, 70 years after the death of Gesell and nearly as long after these experiments, they are all forgotten even when the lessons that can be learned from success and ultimate failure of them can show a way to the survival of this civilisation and of mankind.

Wära was started during the lifetime of Silvio Gesell but he never took part in it und it became significant only after his death when it found a focal point in Schwanenkirchen.

Wörgl was started 1932 in Austria after Wära was already stopped in Germany by the government and was also stopped after 14 months by the force of law. The Austrian National Bank tried to have the experiment closed down before it even started and was barely in time successful just before an additional 200,000 to 400,000 people were going to join the original 5,000, which might have made it unstoppable and would have ended the depression which led to world war II.

We should learn what caused the success of Wörgl and should also find ways to avoid its untimely end by force. All it would take is the willingness to keep a successful experiment going even against opposition for one more additional year. By then the number of participants alone would make it impossible to stop.

What exactly did Michael Unterguggenberger, the major of Wörgl do, which made his experiment succeed while hundreds of follow-up experiments in the rest of the world failed? Why was the experiment of Wörgl since then never repeated? Those are the questions we have to ask ourselves.

The second question can be answered quite easily. There never was a severe depression and deflation since then. Slight inflation in all industrial states supplied a demurrage-like force to keep money in the market and everybody believed that deflation is a thing of the past and will never happen again. Everybody who looked farther ahead and saw that the deficit spending of all governments will in time build up debts which can never be paid, was laughed at and never taken seriously. Everybody saw it happen in lots of countries, but as long as it did not affect their own people did not care.

Now we have come to the end of this road and some countries like Japan try in vain to reverse the process. It is too late. Debts and more to the point monetary assets in exactly the same amount have become unmanageable. The creditors cannot hope ever to see their money again and once they realize that there will be a stampede to get something of value for the monetary assets. That means inflation which is only kept hidden because people still hope against hope that there are willing and able debtors, who will eventually pay their debts.

The first question takes a bit longer to answer but we should seriously try to find the answer in case another depression gives us the chance to repeat and surpass Wörgl. Here is, in short, what was done in Wörgl:

With the town bankrupt and no help in sight to give the unemployed work or relieve it was not hard for Michael Unterguggenberger to persuade his Council members of all parties (he himself was Social Democrat) to try the experiment. He had 32,000 Schillings worth of his alternative money printed which was „backed" by the same amount of National money. The difference being that the alternative money had only local validity and was not legal tender and had a demurrage which had to be paid by affixing stamps of the value of 1% every month on therefor provided spaces on the bills. 1,000 Schilling of this money was given to welfare recipients, some was used as part payment for employees of the city and some as payment for services. That was how it was started. All in all there was only an average of 5,293 Schillings in circulation for the entire length of the experiment. The full amount of demurrage collected was 740 Schillings (25 Groschen per person – babies included). (Anybody who thinks that there is money to be made by introducing local demurraged money should think twice.)

Nevertheless, there was between 2 to 3 million Schillings worth of trade generated by this money in one year and the unemployment was in short time reduced by 25% while in the rest of Austria it increased by 10% during the same year. This was done because the money of Wörgl changed hands about 500 times a year while the official money was hoarded and changed hands at most 10 times a year.

The reason this money was accepted in payment despite the demurrage is quite clear when one sees how little this cost affected people who were using it. Everybody or nearly everybody accepted it because there was no other money around and with a lower demurrage of maybe 6% it would be accepted even more readily. It was helpful that the city accepted this money for taxes and around 7% of it were used for that purpose, which allowed the city to have public work done and reduce unemployment by that some more.

Most of the follow-up experiments in the rest of the world used a very high demurrage (which Irving Fisher had proposed) of 104%, which made their acceptance impossible. Irving Fisher seems to have changed his mind later and had come to accept the 12% of Wörgl but by then it was too late. Armament and re-inflation took the place of demurrage.

We see now, how little alternative money is needed and how easily it can be introduced given a depression but there are still some faults which were not considered in Wörgl

The most significant is the missing stable purchasing power. A stable purchasing power is not as important when the first money is deflated becaus deflation does not change the price level very fast and the money of Wörgl could therefor be held at par. But we know that especially when Freemoney takes over a significant amount of trade the other money gets re-inflated and loses on value. In this case the lower demurrage becomes important for the continuing acceptance of Freemoney. It must stay in circulation until people use it for its stability as they do now in the former eastblock use Dollars and DM because they are more stable than their own money.

How the demurrage is applied is a secondary matter and doing it like in Wörgl only with 1% every two months instead of 1% every month would work just as well as using 5 or 6% every year on alternative money with expire dates. Maybe we should not even call it demurrage. Renewal charge might be better. Or user fee.

One more must is the exchange rate to the original money. This exchange rate must be introduced right at the beginning, because money with costs for idleness can spread much faster as we can dream now. This was shown in Wörgl if one just looks closely enough. There is after all only one supply of goods and services now for two as demand on the market acting currencies and if one of them is stable...

Yes, alternative money can speed up the demise of the old money but this should not make us hesitate. The excesses of the last 60 years will have a reckoning whether well thought out secondary money is introduced or not. Such a money can provide a safety net as can a stable reference currency and let us hope that both can be provided.

Let us now repeat in short what attributes local or regional (or even national) money must have.

It must have a stable purchasing power. This can be done by having an exchange rate to unstable other currencies which show this.(even when the unstable currency is the national one)

It must have a renewal charge. (As much as necessary to keep it in circulation and as little as possible to assure its acceptance as medium of exchange.)

It must have an issuing agency, which is flexible enough to keep going even against opposition as long as necessary. (Considering the possible fast spreading of a money as seen in Wörgl this should not be overly long.)



There would be no problem at all, if National banks and government would provide such a money. Nobody would even think about creating a complementary currency. Why have governments and their banks never done it since the beginning of time? Why do some even oppose the smallest local experiment with a stable means of exchange? What is the reason for it?

It should not challenge the long established national money, if people use another locally. Or is the national money on such shaky feet? If that is so, would not it be better to get rid of it and let stable local money take over everywhere?

There is no law against the government issuing its own stable money if the national bank cannot provide one. Why let not local government do it as it did in Woergl? Why should there not be a free competition and may the better money win?

What would it hurt if one town or a small region would use some other means of exchange as the rest or a country? How could it hurt an established money which is the only legal tender? There is no forging of the national money. Nobody is forced to use or accept the local money. There will be only a small amount issued. The issuing agency will guarantee its purchasing power. What can be wrong with this?

Nobody would mind if people would use other money or gold or silver beside the local money as medium of exchange or store of value. Nobody would say a word against using the national money or book money (which is transfer of daily accounts). If they do it, so be it. There is only one thing. The same right must apply to the local money. Whoever wants to use it should not be hindered to do so. What could be wrong with it, if people would want to use a money which keeps its value? Use it for honesty in their dealings with a longer time frame and in their daily dealings?

There is something very wrong with a government which will not allow this. What reason can the leaders of such a government have? Who are the people, who fight with every means at their hands against even a proposal of such an honest money? Who are the people, who try to keep the knowledge of such a possible stable money away from the public and from education up to the highest pinacle of the universities? Is there really a sinister force at work?

Where is the other force? Is it here? Is it so simple, that we cannot see it? Or are we afraid to look?

One question about the backing for such a local money should here also be answered. First, the issuing agency has only to back up the actual cash. As we have seen in Woergl, this was only one Dollar per person in the market. If someone tries to make an issue out of that - his or her motive must be carefully considered.

In case that accounts and account transfers on the basis of the local money are done and there is no reason why not, because every bank can handle such by the simple method of allowing such accounts as they do now with foreign currency accounts, the backing is clear.

The money in these accounts which might , just as now, be much more than the cash in circulation is backed by the debtors - exactly as it is now. Cash and the value of it is always in the begin and the end of such money transfers and it is not the money itself which gets transfered but the right to it.

( Theoretical and seeing circulating money as M times V - V for velocity of turnover - such transfers do not change M but only V)


Step by step.

First step:

Publish the exchange rate for a stable secondary money and keep doing it. (This is already done - see V80)

Step 2.:

Print such a local money and apply to it some form of charge to prevent hoarding and give it a name.

One simple way to do it is to have money with expire dates which is exchanged in a year for new new one with new expire date a year later and charge for this service 5 % of the nominal on the bill. Put a guarantee in writing on the bills that they will be exchanged at the daily exchange rate. (exchange fee applying - it was 2% in Woergl)

Step 3.:

Put it in circulation.

Considering the little amount necessary (as the example of Woergl showed) this is easily done. Whoever could not afford to buy the 2 Dollars worth which are needed, can do some work for it or give some durable goods in storage for it. This is only for the first issue. Later people will have to earn money just as they have to do it now. The issuing agency could even give some away as was done in Woergl for the first 1000 Schillings, another 600 being given out as part of the wages for city employees and as full wages for some work done. The easiest way would be the one Canadian Tire uses. Give it as a cashbonus with purchases. Once in circulation it would benefit any business with additional sales. Contrary to Canadian Tire Money it should be accepted by a larger group of stores. This would start a circulation where at the next turn, when the money will enter the stores again the storeowners will use it to buy supplies locally, pay their help or other local people who do work for them or give it out as the 1% cash bonus again. The money will stay in the community and will generate untold trades.

There is one thing to consider. Just as there is a minimum market a necessity for a local money to work properly so is a minimum amount of this money.

Still, even a lesser amount will do for a start. This money is, after all, only a complementary second money. Stores will buy it as a sales promotion from the issuing agency whoever that will be (maybe the chamber of commerce, cityhall or local banks) and then, once in circulation will harvest the benefits from the formerly unemployed. The agency will hold this money stable by selling only as much as the exchange rate warrants and will put the quarantee for this right on the bill and prove it by freely exchanging it for other money if asked.

This is it!

These bills will look like any other money with the exception that they have expire dates . Remember they will be stamp script without stamps and nobody will notice any other difference in using them. One can put them in the bank and use bank transfers for larger payments as one does now. The only thing which is different is that it would be costly to hold it for a long time at home past the expire date.

To prevent tampering with the expire dates and make them easily recognizable, the dates should be put on by punched through holes.

Graphic 1

v80-10en[1].gif (20121 bytes)


Graphic 2

Purchasing Power of the CAN$ and Exchange Rate to the Stable Currency Unit V80

Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Purchasing Power 100,0 89,0 80,3 76,0 72,7 70,0 67,2 64,4 61,9 59,0
Exchange rate V80 100,0 112,5 124,6 131,7 137,5 142,9 148,8 155,4 161,6 169,6
Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Purchasing Power 56,2 53,2 52,5 51,5 51,4 50,3 50,0 48,6 48,1 47,3
Exchange rate V80 177,8 187,8 190,6 194,0 194,5 198,6 200,1 205,8 207,7 211,6
Year 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010
Purchasing Power 46,0                  
Exchange rate V80 217,3                  


How to start V80.

We now know already a lot about the proposed local money and there is only one thing missing. A simple step by step guide how to do it. What is the first step and the next and the next?

It follows the basic facts about this money. It should in the first place have a stable value and this is also the first step. Introduce a standard of value like our V80 and publish it and keep publishing an exchange rate to the unstable other money. This is the basic first step. It is secondary how many people will use this standard in the beginning. It is enough that it is available.

Nobody will be or can be forced to use it but it will be there to use if two partners in a deal with a longer time frame are willing to use it. This is all that is needed for a beginning. No laws are necessary to enforce it and it can rest solely on the honesty of the two partners. There should only be some written record of such deals. What will keep one of the partners from reneging on such a deal if he would profit by doing it? The simple fact that the hurt partner could publish this fact. The dishonest one would then only have a very short-lived gain, because nobody would like to deal with him after that.

The following steps will actually develop by themselves. As long as the regular money has a slight inflation which will keep it on the market nothing else needs to be done. People will slowly get used to do their deals with a longer time frame with this stable standard and that will be it. There is no necessity to introduce any kind of demurrage. The slight inflation of the other money will supply the necessary force to keep it in the market.

What will happen if the slight inflation gets out of hand and develops into a hyper inflation? Again nothing needs to be done. There is still the stable reference standard and the exchange rate will show the extend of the inflation and probably more people will start using the stable (virtual) money in their dealings even in short time exchanges. If the inflation gets really bad they might even use some kind of local cash or IOUs as they did in times of bad inflation before - only this time some of the cash will be in stable money denomination if some responsible agency will issue it. This money will need some demurrage to keep it from being used as excessive store of value.

Now the case of deflation. Here we have the situation that the other money becomes more valuable in terms of average prices and therefor also compared to the stable reference money. People will therefor hoard it and it will disappear from the market, thereby causing a loss of sales and unemployment. Something must be done then. There is still the stable money and it will be used as such for cash-less transfers, but this is a clumsy and time consuming way to do business. The lack of cash on the market will be felt and then new money in form of cash will become a necessity. It will need to be in stable money nomination and because stable money also can be used as an excessive store of value it must have a demurrage-like force connected to it to keep it on the market. As we said before, a fine in the amount of 5 or 6% in a year is enough to keep cash from being idle for a year.

Most money reformers are putting the cart before the horse when they try to introduce some money or money surrogate before they establish a stable point of reference. Once a stable reference point is established everything else will fall in place as shown but it would be wrong to use the price of a single product like gold as reference. Especially using a relative useless material like this which has hardly a connection to other prices is senseless. Using for instance something like Kilowatt-hours would make more sense because there is at least a connection to other prices of energy given. Even using wheat or oil would be an improvement because there also exist cross-connections to the prices of other more commonly used goods.. Still best is though the use of the prices of a representative basket of goods generally used. The consumer price index (CPI) is that exactly.

It might be a little harder to explain it but most people would not bother to ask for explanations. They do not ask for them now about the fluctuation of prices and the loss of value of their money.

People are not stupid and when they see a stable currency they will notice what it could mean for their money. Having stable money is having the key to freedom. This does not mean that a deflation must be waited for until local Gesell money can be started. Stagflation with unemployment and business failures is reason enough to start one sooner as second local cash currency and not only as stable reference currency like V 80. How to do this depends on the situation and how this money must be, is explained in blueprint.





The graphics show the first introduction of DM V80, the virtual stable reference currency on the basis of the value of the German DM in the year 1980. Later the same was done for other mayor currencies and can easily be done for any other currency when needed. It is nothing but an application of the CPI. (consumer price index)

More information can be found on the following web-sites:

Sorry that most of this is in German, but there is a lot of English material too.

There is also an English part including V80 with graphics for selected currencies and the English translation of Silvio Gesell’s mainwork on the following web-site

And here are a few exchange rates for the stable V80Can$ to the Canadian Dollar:

1980 = 100, 1985 = 70.0, 1990 = 56.2, 1995 = 50.3 and March 2001 = 45.6

It shows that since 1980 the Canadian Dollar lost less in value as Italy, Spain and the UK, stayed about level with France, lost some against the US and more to Germany, Austria and Switzerland and against frontrunner Japan. Mind you not necessarely on the official exchange rate but on the internal purchasing value, which is not always the same thing because sometimes currencies are over or undervalued.