John Guth

email: guthltd@mpx.com.au

This site makes available some of my thoughts on currencies and energy transfer.

I initially joined my local LETS group because I was keen on the idea, and I knew commercial trade exchanges were going ahead quickly (from having worked in them). To my surprise, I found out a number of disturbing facts

1) The local group was barely alive. I was immediately made President/Coordinator due to lack of anyone else who wanted the job.

2) This group had a large number of people on high positive balances who said they were unable to spend them, in spite of harassment from the committee to do so.

3) This group was characteristic of LETS groups in Australia (most of which are defunct, see Penny Ferguson's excellent list of LETS groups in New South Wales for details, defunct groups at end, on www.lets.org.au)

This site collects together my responses to that finding, going on to solutions we are looking at to make our own local LETS group here in Canberra a really effective way of Energy Transfer between our members.

Biography and photos of John.htm Just in case you wonder - who is the faceless gnome producing these analyses?

LETS Dogmas and Refutations.htm This is a nutshell set of points about what I believe is wrong with the LETSystem design. It is parallel to something Tom Greco said briefly in the middle of an obscure paragraph in his "Improving Local Currency" http://circ2.mindspring.com/implocur.htm. About 3 pages in, under the heading "Essential features of LETS", he said "Of course... there will always be some who default... These defaults should be recognised at some point and 'written off' ". I believe he hid the comment there to avoid confrontations.

Effect of extra positive points.htm This is a collection of arguments about why an excess of positive points in circulation is a problem for LETSystems which have it (virtually all).

The Life Cycle of a LETSystem.htm This is a picture of what happens through the life of a LETSystem. It presents a view based on the gradual appearance of imbalance in points as energy leaks out of a system.

LETS Resolution for general meeting of QBC LETS.doc - This was my first response to the problem. In a nutshell, it makes a number of complicated rule changes to restrict people's use of their points, making most of the excess points disappear into 'holding accounts'. There are also new strict negative limits on people's accounts. It was an attempt to make the system work in a similar way to a restricted-supply paper currency like Ithaca hours (at some stage, I hope to write something explain the exact correspondence in systems). Problem with this: Ithaca hours only worked well in Ithaca due to brilliant management by Paul Glover (see http://www.andrewlowd.com/thesis/Contents.htm for a thesis on the poor performance of similar systems through the USA).

LETS.IOU system rationale & scheme.htm - This is our current scheme. This document is being circulated to our members for a meeting in July to vote it in. This scheme has, I think, a fairness and simplicity to it that make it likely to work. Note that it would be applicable to almost all LETSystems.

New IOU.tech points.htm - This makes a few points about our current scheme that I thought were too obscure to interest the members of our local group.

LETSystem giving away energy.htm - This is an imaginary LETSystem that has members also earning positive points when they do charity work for people outside the system. This nicely illustrates the problem with conventional LETSystems allowing people to leave with negative balances.