Anthony Migchels was gracious enough to comment in two of the posts on this subject – here and here. As I did with memehunter, I will reply via a new post, as the discussion merits this treatment.
I'm saying that when all backward payments (most certainly not just taxes) are settled, the money supply (of certificates) needed is smaller and thus certificates can be converted back.
This is why I claim the experiment is bound to end – even without the national bank intervention. If the only use of the certificates is to convert them back to schillings, of what use are the certificates?
If there are no or fewer exchanges to be financed, less or no of the certificates are needed.
Fewer exchanges mean fewer transactions mean no miracle. The economy returns to the pace it had without certificates, because the economy is running without certificates.
Your calculation is all wrong BM: 7000 in transactions per day is NOT 7000 in scrip! These transactions were financed with 5000 in circulation, meaning the certificates exchanged hands maybe 1,5 times a day.
Walk through step by step. I am a municipal worker. I get paid in scrip. I can either buy something with the scrip, pay back taxes, or exchange it at a 2% charge for schillings. In order for me to buy something with scrip, a vendor must be willing to accept scrip. But at some point when all past due liabilities are settled (as you have already stated), the scrip will then be converted to schillings to avoid the demurrage – the only place the scrip has 100% value at month end is in the payment of taxes, and these back-taxes are by now fully paid.
So, as in your math the scrip that previously turned over more than once per day (5500 outstanding, 7000 in transactions per day), now will be disposed of by another means – THAT DAY. The only other means is to turn the scrip in for exchange to schillings. At the previous rate of circulation, this would happen 7000 times per day.
All you can counter with is to say the rate of circulation will be lower (the holder of scrip will wait until the last day of the month before converting his scrip to schillings, in hope of having some better use and avoid the 2% charge), at which I will ask: where does that leave the sustainability of your miracle?
My logic holds, and the math holds. The parish had 40,000 available to exchange. This would have been depleted in 6 days.
Again: I'm talking about a means of exchange, you are talking about a store of value. A means of exchange needs to circulate to be effective.
As I mentioned in various comments, including my most lengthy post on this subject, I have no problem with various competing and complimentary schemes of money / credit / currency. And if a supplier agrees to accept a form of payment, so be it. I have no quarrel with Wörgl in this regard.
The point of my analysis (and I am oversimplifying) is that the miracle was attributable to greatly increased tax receipts prompted by the depreciating scrip, and that this increase in tax receipts was not sustainable – therefore the miracle was not sustainable.
On this most critical point (my “key issue,” if you will), neither you nor memehunter nor summer offer a concrete rebuttal, although memehunter did rightly ask for clarification regarding the sustainability of the velocity after all back taxes were paid.
Added after initial post:
Again: I'm talking about a means of exchange, you are talking about a store of value.
I do not attribute the property of “store of value” to money / currency. All value is subjective; therefor “value” cannot be “stored” in anything.
However, I maintain that money / currency received in exchange for my labor or other assets is my property. To that property I have a right; however, I have no right to the “value” of that property.
A means of exchange is not wealth. It's not even really private property in the real sense of the word. It's more a public utility that we use together.
Whatever I receive in exchange for my work / product is my property. To argue otherwise is to argue for some form of collectivism. Collectivism, when forced, is an immoral proposition; and in any case, has never shown to be as effective a means to increase wealth as a system that respects private property. As this is secondary to my main points, I am fine to leave this difference between us as is.
The only thing there is is Money Power and PTB opposition obscuring the issue and preventing from people finding out.
Again, as I have mentioned, I agree that the actions of the national bank at the time to stop the experiment were wrong, and I agree that decentralization and open competition in all facets of the economy (including currency) is better than the system we currently live under. I also agree that money power and national governments do work hard to maintain centralization, and use all tools available to keep their monopoly position safe.