Annexe 2 – Decaying paper money

Excerpt from the book »Gradido – Natural Economy of Life«

The gradido’s decay is very easy to realise in electronic payments systems. In a similar way to negative interest, it is precisely calculated in the background down to the second and debited from a person’s balance on account at the end of the month. Thanks to new mobile technologies, such as smart phones, more and more electronic payment possibilities are coming on to the market. Whether you like it or not, the trend is clearly away from paper money towards electronic payment.

In case cash is still needed, we offer two possible solutions:

Option 1: The value of paper money is updated at regular intervals by sticking stamps 

                on it.

Option 2: A »dynamic currency«, which constantly changes in value, is introduced

                parallel to the gradido.

We describe the second option below.

The dynamic currency FREE

The name »FREE« stands for »free energy exchange«. The gradido and the FREE together form a »tandem currency«, in which the value of the gradido is constant, whereas the FREE changes in value in relation to the gradido in the course of the year. The paper money is reprinted every year. The figure for the year is printed large so that it is extremely visible.

In transactions which require precision, the gradidos are converted to FREEs according to the rate on that day. This is, above all, the case with large amounts or when the amount is paid into or out of a gradido account.

With small amounts, such as are common in everyday life, adjustment every three months should generally suffice. In this case we only need to remember three simple fractions: ¼,  ½,  and ¾. The quarterly adjustment of the FREE is extremely easy to calculate:

At the beginning of the year 1 gradido = 1 FREE,

after three months (1/4 year) 1 gradido = 1¼ FREEs or 1.25 FREEs,

after six months (1/2 year) 1 gradido = 1½ FREEs or 1.50 FREEs,

after nine months (3/4 year) 1 gradido = 1¾ FREEs or 1.75 FREEs.

In the following year two old FREEs are treated like one new FREE. The old notes go back to the issuing institution via the shop tills and are withdrawn from circulation during the course of the year.