Why we Need a Monetary Ecosystem

Scientific Evidence for Complementary Currencies

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What to answer to

•Those who claim that Bitcoin is a potential

problem for banks or the official money

system?

What to answer to

•Those who claim that Bitcoin is a potential

problem for banks or the official money

system?

© Conventional money provokes various un-

sustainabilities

(2) Conventional money is structurally unstable

(3) Bitcoin as part of a monetary ecosystem is part of

a solution for systemic instability!

A Simple Question

•Who creates conventionalmoney?

A Simple Question

• Whocreates conventionalmoney?

-The Government?

-Central Banks?

A Simple Question

•Who creates conventionalmoney?

—The Government?

—Central Banks?

—Someone else?

All « national » moneys are created

- out of nothing (« fiat » money)

- through bank debt

- with interest!

How many of you have used a

complementary (non-conventional)

currency other than Bitcoin?

Plan

• Conventional Money generates un-sustainabilities

* Systemic Cause for Monetary Instability

* Systemic Solution

• Conclusions

Conventional Money System is theSystemic Cause for 4 Un-sustainabilities

1 !t Amplifies Business Cycles

2) It Makes Economic Growth Compulsory

(3) It Automatically Concentrates Wealth

@ It Programs Short-Termism

1. Money Creation Process amplifiesthe business cycle

EconomicCycle

after money

Creation

Business(Inventory)

Cycle

2. Compulsory Growth

GRO

•When a bank creates money through

a loan, only the principal is being

created, not the interest.•Without new loans (i.e. new growth),

everybody goes bankrupt!

3. Money System AutomaticallyConcentrates Wealth

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•What is the Median wealth(most frequent amount) of US

households?

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Comparison of Interest Paid & Gained

in ten groups of households of 3 8 million eachreference year 2000

all values in thousands of Euros per household per year

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The Transparency Misconception:"Interest is paid only when we borrow money"

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4. Conventional Money GeneratesShort-termism

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Plan

• Conventional Money generatesunsustainabities

• Systemic Cause for Monetary Instability

• Systemic Solution

• Conclusions

Money System is itselfstructurally unstable

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Between 1970 -2010 IMF identified:145 banking crashes204 monetary collapses76 sovereign debt crises

425 systemic crises = more than 10 countries/year!

My Claim: Our conventional money system isstructurally unstable!

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Sustainability of Complex Networks

•Robert Ulanowicz 25 years of ecosystems flowdata. Natural ecosystems have in common to besustainable. What else do they have incommon?

Sustainability of Complex Networks

•Robert Ulanowicz 25 years of ecosystems flow

data. Natural ecosystems have in common to besustainable. What else do they have incommon?

•Sustainability of complex network results fromappropriate balance between andResilience, emergent properties from 2structural variables of complex networks:diversity and interconnectivity

Balance in Natural Networks

Resilience

Efficiency

(In)Balance in Our Financial Network

"Monoculture = accident waiting to happen"

Efficiency

Resilience

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« Monetary Ecosystem » is NOTa

metaphor !!!

•Diversity and intercormectivity are 2 structural

variables => applies to all complex flow networkswith similar structure, including money system!

• Structural variables are independent from what is

being processed in network

— biomass in an ecosystem,

— electrons in electrical circuit,

- information in immune system,

- money in an economy

Key Points

© We need monetary diversity, even to stabilizethe conventional money system

(2) Resilience requires sacrificing some efficiency

(3) Digital Age Monetary innovations provide

tools to motivate people at different scalesand issues.

Plan

* Conventional Money generatesunsustainabities

• Systemic Cause for Monetary Instability

• Systemic Solution

• Conclusions

Sustainability Optimum

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Plan

• Conventional Money generates un¬sustainabilities

• Systemic Cause for Monetary Instability

• Systemic Solution

Towards a Monetary Ecosystem:

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Other Examples

* Big variety of socialpurpose currencies: elderly

care, ecological, learning, etc.

• Terra: A global currency that makes it profitable

for multinationals to think long-term

* Dual Currency Banking reduces poverty (Brazil)

•Loyalty Currencies: most common commercialcomplementary currencies

•Etc. etc. etc.

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Plan

• Conventional Money generates severalun-sustainabilities

• Systemic Cause for Monetary Instability

• Systemic Solution

• Conclusions

Our international monetary system is in

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Value ShiftPatriarchal vs, Matrrfocal

Patriarchal Societies • Matrifocal Societies

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Value Shift

Patriarchal vs. Matrifocal

* Patriarchal Societies

Monopoly of centralizingCurrency with interest

=> Great for Industrial Revolution

• But Promotes:

- Booms & Bust cycles

- Concentration of wealth

- Destroys community(incompatible with gift

economy)

• Matrifocal Societies

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Value ShiftPatriarchal vs. Matrrfocal

* Patriarchal Societies

Monopoly of centralizing

Currency with interest=> Great for Industrial Revolution

• But Promotes:

- Booms & Bust cycles

- Concentration of wealth

- Destroys community(incompatible with gift

economy)

* Matrifocal Societies

Duai Currency Systems

- Partriarchal one for long-distance

- Different type of currency (bottom

up) for local exchanges

• Promotes:

- Economic stability for centuries

- General well-being for the "littlepeople”

- Builds and sustains community

Value ShiftPatriarchal vs. Matrifocal

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Conclusions

© We need monetary diversity, even to stabilizethe conventional money system

(2) Complementary currencies make it possible

to flexibly adapt to the changes coming in the21st century

(3) Bitcoin and other crypto-currencies are part

of a systemic solution in an emerging

monetary ecosystem!

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Follow Up

• www.lietaer.com

• bernard@iietaer.com

• Articles in 4 different peer-reviewed journals

• => see www.lietaer.com/research