DMR. Controlled Inflation or Demurrage
... how can one ensure the value of money (MNY) doesn't become volatile and that it maintains the measure of value (MOV)? How can the liquidity (LIQ) of money be encouraged?
If money is a perfect store of value, why would anyone part with it? If too many people have too much money and demand skyrockets, how can inflation be prevented? If salaries crash and no one has any cash, how can prices be kept from deflating?
Current money is a 'store of value'. If you have a dollar today. Bury it for 10 years. And then dig it up. You still have a dollar.
Your only enemy is inflation. Your only friend, deflation. It is very unlikely that you will be able to buy the same amount with that dollar in 10 years.
If one buried a bushel of wheat, would you expect it to be worth the same in 10 years when it is rotted?
Even gold decays on an atomic scale. And gold is worthless for all but petty or highly scientific things.
All things wither and die without upkeep. And so we believe that our money must do so as well. Now the good news is that things full of life also grow and reproduce. Do not despair that our money will die. It will also thrive.
We propose to control inflation/deflation with Demurrage. Proposed by Silvio Gesell in the 19th century, Demurrage is a process by which a unit of currency 'decays.' The rate at which it decays can be manipulated as to encourage the liquidity and flow of money through the economic piston. If inflation is too high, the demurrage value can be lowered and people will be more encouraged to carry cash balances. If deflation threatens, the demurrage rate can be increased to dissuade people from holding cash. They will look to use it to buy capital and things that maintain value. This will also lead to less waste.
As a hard example, let's say that the demurrage rate is 1% per year. At the end of each month the owner of a dollar would have to purchase a .01 dollar stamp and affix it to the dollar to maintain its value. If the owner does not want to pay the tax, he should spend the dollar before the tax is due. If she is wise she will spend it on something that may return her a dollar or more's worth of value in the future. This is the idea of stamped money and it is not practical in our digital age, but the concept can be extrapolate out to digital currency.
Therefore:
Inflation and deflation must be controlled with demurrage.
Demurrage can provide solutions to taxation (TAX) and must be balanced with Interdependence and/or nth order decision making (INT).