Tag: finances

New CCS idea for debate

IJCCR

Volume 24, 1 – Winter (2020), pp. 61-74

The Financing of Investments in Long-term Assets and the Inverse Maturity of Deposits in the Commodity-Money-Commodity Type of Mutual Credit

Samo Kavčič*

*Independent author, Radovjica, Slovenia – Email: samo.kavcic@dobrava.net

Abstract

This paper focuses on the financing of investments in long-term assets in the Commodity-Money-Commodity (komoko) monetary system (KMS). The KMS is a special, currently still theoretical version of mutual credit, first introduced in the 2016 summer issue of the IJCCR journal. In dealing with capital goods financial circulation is indispensable. However, financial circulation is prone to speculation, a practice not at all endorsed by CC (complementary and community currencies) communities. Separation of the real and financial exchange circles introduced in the original KMS paper is a method by which community currencies can dispense with speculation and other forms of potentially harmful financial circulation. Separation of the real and financial exchange circles proposed by the original KMS paper is based on a rigid, rule-based barrier between the real economy – which produces new goods and services on one side, and the financial economy – which deals with the exchange of old durable and capital goods on the other. This separation method may, however, be potentially either too cumbersome for businesses or too easy to evade. An improved method of separation of the exchange circles is proposed which basically eliminates the elements of the rule-based barrier and substitutes it with a new feature called inverse maturity of deposits. To implement inverse maturity of deposits, the KMS evolves from a plain ledger-based currency into a form that resembles accounts payables and accounts receivables. This new form of KMS which tracks the maturity of credits (demand deposits) puts the KMS in stark contrast to the existing fractional reserve banking which tracks the maturity of loans i.e. debits. The paper discloses how the KMS, featuring inverse maturity of deposits, dispenses with excessive financial circulation without impeding the real circulation and at the same time supports the use, exchange and production of capital goods. This renders KMS a currency that can crowd out legal tender.

Keywords

Mutual Credit, Finance and Investment, Velocity of Money, Inverse Maturity, Liquidity

Article Kavčič

To cite this article: Kavčič, S (2020) ‘The financing of investments in long-term assets and the inverse maturity of deposits in the commodity-money-commodity type of mutual credit’ International Journal of Community Currency Research Volume 24 (Winter 2020) 61-73; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2020.005

 

 

Complementary currencies and the financing of investments in long-term assets

IJCCR

Rolf F.H. Schroeder

Independent author, Bremen, Germany.  rolfschroeder.h@t-online.de. www.rolf-f-h-schroeder.de

Article Schroeder

The question raised in this article is whether the focus on “money”, as the key concept in the analysis of community or complementary currencies, is justified. The investigation shows that the economies which facilitate exchange with alternative currencies are also based on “capital.” In some cases, capital is created within a community or complementary currencies; in others, synergies exist between the alternative currencies and other ways of financing long-term assets like microfinancing schemes. In order to better understand the grey zones between these different spheres an all-encompassing use of the notion of “money” should be avoided.

To cite this article: Rolf E.F. Schroeder (2018) ‘Complementary Currencies and the Financing of Investments in Long-term Assets’ International Journal of Community Currency Research2018 Volume 22 (Winter) 4-14 <www.ijccr.net> ISSN 1325-9547. DOI: http://dx.doi.org/10.15133/j.ijccr.2018.002

The Financing of Complementary Currencies: Problems and Perspectives

IJCCR

Costs and cost coverage of complementary currencies has been neglected by researchers so far. This article provides an analysis of the different types of costs incurred and asks for appropriate means of financing such projects. External public and private sources are discussed in a critical manner. Self-financing appears to be a viable alternative; however, considering overall transaction costs, the burden to be carried by participants is considered to be a significant constraint with regard to this source. In the final part the question is discussed whether and how it can be possible to finance regional currencies that would have a significant economic impact. A scenario illustrates the potential of this feature with regard to the construction of new types of systems.

Rolf. F. H. Schroeder

IJCCR 2015 Schroeder

To cite this article: Schroeder, R. (2015) ‘The Financing of Complementary Currencies: Problems and Perspectives’ International Journal of Community Currency Research 19 (Summer) 106-113  <www.ijccr.net>  ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2015.011