Amasset is a new word to describe the investing of newly printed money to produce community assets for a specific community purpose. The purpose may be supplying a community with water, reducing greenhouse gas concentration in the atmosphere, building an urban transport system, supplying a community with a sewerage system, or any other form of infrastructure spending that benefits a whole community. The money is to given to many individuals who may already be contributing to solving the community issue. The money must be invested by individuals on the community purpose but it must also directly benefit individuals. 

In most economies the money supply is increased by banks lending money without having any money on deposit. There are limits on how much money a bank can create this way. This is determined by the banks being required to keep an amount of money with the Reserve Bank. This process is hidden and confused because as soon as a bank creates extra money it appears in the borrower’s bank account. Also the reasons for giving a loan are the same whether the money already exists or whether it is newly created money. The reason this approach to creating money is seen to be a good idea is that the loan has to be repaid. This means that the borrower is likely to use the money to good advantage and will not risk other assets mortgaged against the loan. This approach works because some of the loans made will turn into new productive assets that will back the loans made with new money. Unfortunately it makes an economy vulnerable to booms and busts.

An amasset is another way of increasing the money supply without creating a loan. Instead of the banks creating new money, the government creates new money and gives it to people but with the requirement that the money will be invested to produce a new productive asset.

Examples of amassets

• An amasset to reduce greenhouse gas concentrations in the atmosphere would be to increase the money supply by some amount and distribute the increase in inverse proportion to the amount of mains electricity consumed by an individual at their place of residence. The money remains interest free until it is spent. The individual is free to invest the money with any supplier of goods or services who can prove that investing in their product or service reduces the level of greenhouse gases in the atmosphere.
• An amasset to supply a country with a communications network would be to fund company builders of infrastructure with newly printed zero interest money. The money is distributed to individuals in the community as shares in the companies. Individuals would receive shares in inverse proportion to the level of their home connection at some point in time.
• An amasset to build education infrastructure would be to supply individuals who are currently enrolled to study with funds that must be spent on infrastructure to supply educational services.

A country can decide on its priorities for building community infrastructure and each amasset targets a particular area of investment. The system works because individuals will try to spend their money to their best advantage. If an individual does not want to spend their funds they can sell them for whatever the market will give them. This gives the authorities a measure of how much money can be spent to good advantage within each amasset.

Other system advantages arising from amassets

The approach has other advantages and can be used to prevent asset bubbles, remove inflation from the general currency, redistribute wealth to the most needy, and reduce the likelihood of recessions and depressions. 

• Because the methods of increasing the money supply are heterogeneous this reduces the risk of asset bubbles. When an asset bubble appears an amasset can be used to defuse the bubble by supplying funds. For example, if a housing price bubble appears funds can be given to people who are willing to invest in a new dwelling. 
• The system is non inflationary because if too much money is issued for a particular amasset then those funds will inflate in value rather than the regular currency inflating in value.
• A criteria for distribution of funds for a particular problem – such as funding transport infrastructure – could be the level of assets possessed by individuals.  This increases the wealth of the poor while not affecting the wealth of the rich.
• Recessions and depressions should become a thing of the past because money for investment can always be made available. Periods where the banks are unwilling or unable to lend need not arise. Interest rates on money for investment will tell authorities when extra money is needed.
• There is a limit on the amount of money we need to invest in community infrastructure. For a given purpose we can make good estimates on the resources we need to allocate to resolve an issue. We can tell when a community purpose has been resolved and so we can evolve the economic development of society.

The underlying reason why amassets work

Market based economies are efficient ways to distribute resources to get the best value for money spent. Problems arise because the monetary system is too homogeneous. By making money (resources) easily transferrable we have introduced system instabilities as money rushes from one area to the another as opportunities arise. Restricting some money to specific areas stabilises the system and allows it to adjust slowly under our control. An amasset is a mini market economy and it distributes resources efficiently while meeting its reason for existence. Once its objective is achieved the amasset can be disbanded and removed. This brings diversity, adaptability and evolutionary development to economies.

Amassets introduce diversity into economic systems. Diversity is an important control mechanism for any complex adaptive system. An example that illustrates this comes from the behaviour of a colony of bees. Queen bees are promiscuous and mate with many males. This brings a small amount of genetic diversity in the behaviour of the queen bees offspring. This in turn leads to small behavourial changes in the way bees react to changes in temperature of the bee hive. Read a short summary at http://nationalzoo.si.edu/Animals/Invertebrates/News/bees.cfm. Amassets introduce diversity into an economy with similar stabilising effects on the whole economy.