Comment on Liquidity Networks: local trading systems using a debt-free electronic currency by Bruno Ricardo

3. About inflation: This hyperinflation it´s impossible if the system is 100% insured. The system must provide by contract or insurance that all money inside the system is fixed to the euro and convertible
So if you have 2.000.000 euros in internal liquidity that means that there is need to be 2.000.000 euros in insurance. This is why insurance companies exists. And this is why they like this business of new currencies – more sales of credit insurance. No need to put aside all those euros. This operations have much lower risk than the specutative ” Credit default swaps”. This is real business, real consummers, and the market prices nowadays are globally determined. These local communities will still be connected to the world and maybe will raise their exports.

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