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One-Month Money: Why money ruins our economy - and how reinventing it could end unemployment and inflation forever

Book Description

MONEY MAKES THE WORLD GO ROUND - UNTIL IT DOESN'T Bankers blunder, governments turn a blind eye and investors just get it plain wrong. But what if there's something else lurking behind all our great recessions and depressions, something operating in the shadows that makes our bubbles bigger and our crashes more catastrophic? Something so familiar and ubiquitous that we hardly ever think of its effects - even when it's under our very nose. What if it's money? Our modern system of money is a marvel, enabling complex trade and economic growth on a scale never known before. But money also carries a fatal flaw: it can be hoarded forever, and whenever we hoard we depress spending and distort interest rates. The result is a dreaded sequence of boom-and-bust that we know as the business cycle, an endless swing from unemployment to inflation and back again. But it doesn't have to be this way. ONE-MONTH MONEY begins as an eye-opening demonstration of how modern money is often our own worst economic enemy, and ends by proposing a controversial and innovative solution: a simple reinvention of money that would end recessions, inflation and unemployment forever. By rewiring the banking system and giving money a monthly expiry date, we can create a system of money with all its current benefits and none of its drawbacks, a system where money greases the wheels of global production without ever destabilising it. We can still save - just not under the mattress. Bad businesses can still go bust - just without bringing the wider economy down with them. Once money cannot be hoarded and interest rates are always perfect, there will be no more business cycles. The system of one-month money automatically checks our worst hoarding impulses, allowing us to save productively, keep prices stable and enjoy permanent full employment. With many countries struggling for growth and the stimulus toolbox growing emptier by the year, a creative rethink of our monetary system is critically urgent. ONE-MONTH MONEY is not only a timely and enjoyable addition to a vital conversation, but a book that will forever change the way you think about what's in your wallet.

Table of Contents

  1. Contents
  2. List of figures
  3. About the Authors
  4. A note on terms: what is neutral money?
  5. Introduction
  6. Part One
  7. The Case for Change
  8. Chapter 1
    1. The Idylls of Adam Smith
      1. A World to Aspire to
        1. Savings, Interest Rates and Growth
        2. The Invisible Hand
  9. Chapter 2
    1. Money
      1. Enabling a Complex World
        1. The Evolution of Money
        2. Murmurs of Discontent
        3. The Rotten Heart of Money
  10. Chapter 3
    1. Mr Keynes
      1. Keynes’ Vision
        1. When Money Leaks, the Wheel Creaks
        2. More Than Just Fear
        3. The Truth About Interest Rates
  11. Chapter 4
    1. Central Banks and Their Limits
      1. The Broken Wrist of the Invisible Hand
        1. Inflation
        2. The Central Bank’s Plan
        3. Affecting the Actual Rate
        4. A Herculean Task
        5. The Inevitability of Business Cycles
        6. The Achilles Heel of the Central Bank
  12. Chapter 5
    1. Stimulus – Miracle Cure or Faustian Bargain?
      1. The Best of the Worst
        1. The Naysayers
        2. Desperate Central Banks
        3. Quantifying QE
        4. Mind Games and Negative Reserve Rates
        5. Beggar-thy-Neighbor
        6. Best, Last, and Only
  13. Chapter 6
    1. The Rise of Secular Stagnation
      1. Faust Forever?
        1. Delving Deeper into the Ideal Rate
        2. Demographic Scenario 1: Positive Ideal Interest Rate in Absence of Deficit Spending
        3. Demographic Scenario 2: Negative Ideal Interest Rate in Absence of Deficit Spending
        4. Empire of the Sinking Sun
        5. On the Heels of Japan
        6. Same Old Europe
        7. Art, Not Science
        8. The Risk of Inaction
        9. Central Planning, Central Mess
        10. Down the Hourglass
  14. Part Two
  15. Neutral Money
  16. Chapter 7
    1. The Monetary Violations
      1. Monetary Violation I: Money as a Store of Value
        1. Monetary Violation II: The Fractional Reserve Banking System
        2. Monetary Violation III: Inflation
        3. Monetary Violation IV: Foreign Exchange
  17. Chapter 8
    1. The Monetary Solution
      1. Step one: 100% Reserved Money
        1. Step 2: One-Month Money
        2. Spent Money vs. Unspent Money
        3. The Result
        4. Personal Savings
        5. Allowed Cash Balances
        6. Physical Cash
        7. Interest Rates
        8. Foreign Exchange Rates
        9. Allocating Expired Money
        10. Following the Flow of Money
  18. Chapter 9
    1. The Benefits of Neutral Money
  19. Chapter 10
    1. Common Concerns
      1. What happens if …
  20. Chapter 11
    1. Bubbles, Busts and Runaway Prices: Past Economic Hardships – But Under Neutral Money
      1. U.S. Inflation of the late 1960s and 1970s
        1. The Failure of Lehman Brothers, 2008
        2. The Tech Bubble of the Late 1990s
  21. Chapter 12
    1. Alternative Proposals
  22. Conclusion
    1. Neutral Money in 15 Steps
  23. Appendices
    1. Appendix I: Intellectual Justifications of Neutral Money
      1. Explaining Money Expiration
        1. Why Not Three-Month Money?
        2. Controlling the Money Supply
      2. Appendix II: Closing a Loop Hole
      3. Appendix III: The Transition
      4. Appendix IV: Eliminating the Problem of International Aggregate Prices
      5. Appendix V: Fixing the Euro
  24. Publishing details