| Subject: | Re: [socialcredit] Per's A+B | | Date: | Sunday, October 2, 2005 10:56:48 (+0200) | | From: | Per Almgren <info @........se>
|
At 16:23 2005-09-30, you wrote:
>Subject: [socialcredit] Per's A+B
>
>I've had a chance to look over Per's charts and accompanying text. Banks
>are treated as any other institution. The fact that ALL money comes from
>banks and that money has a life-and-death cycle is not incorporated into
>the charts.
It is incorporated but maybe not visible clear enough. The boxes are either
flows of money or production steps. The interest and fees paid for a loan
is included in the purchase from the preceding box (with the succeding step
number). The creation of new money is shown by the uppermost box to the
right of the production step ("Bank loans") and the destruction of money is
shown by the uppermost box left to the production step ("Repaym. loans"),
i. e. repayments of bank loans.
> Rather, bank loans is in a small box as if it were a trivial element.
The work performed in banks are included in the different production steps
as are any other type of work within the production chain. The loans amount
themselves are not visible in this figure, only the outpayments and
repayments of loans.
>The charts attempt to illustrate money flows in business. In "Money flows
>to and from the steps in production chain" the left half illustrates
>Costs, with payments to previous production step* at the top and payments
>to individuals (Consumers) at the bottom. However, neither the word Costs
>nor Prices appears.
What is illustrated are the types of costs (Purchase from earlier step,
profit and interest, wages and salaries, allowances). There are also three
other types of money flows (repayment of bank loans, money moved to the
storage box for cash, repayment of loans and risk capital to the owners
among the consumers). There is thus no need to use the word cost. Prices
are how much you pay for individual items when you buy them, they doesn't
have the dimension of money flow (dollars per unit time).
> The right half illustrates "Purchase from production step N," in other
> words, Sales.
>
>It's confusing that the previous step to N is called N+1, instead of
>N-1. The chart "Money flow to and from the consumers and to step 1 in the
>production chain" shows why: the LAST step in the production chain is
>called "step 1." This chart shows "Purchase from production step 1," that
>is, Sales, on the left and payments to individuals, from the previous
>chart, on the right. So it does illustrate that payments to individuals
>constitute the Purchasing-Power to purchase production. However, the word
>Purchasing-Power does not appear, nor is there any suggestion of
>Purchasing-Power falling short of Costs and creating a problem making Sales.
The cause for the numbering order of the production steps is that there is
practically not possible to calculate how many production steps that is
included in the production chain, but it is neither necesarry to do it in
order to use the model. For a more detailed mathematical treatment of this,
I must for the moment refer to the paper I submitted some months ago to
this chain.
So the numbering is based on how many steps the parts of the individual
items have to pass before they reach the consumers.
Purchasing-Power is not, as I understand the word, a flow of money. In this
I might be wrong since English is not my native language, I am from Sweden.
What kind of processes that causes problems in the money flow, I intend to
write about that when the model of they money flows in the society are
accepted, in order to have a common ground for the following discussion.
>To discover such a phenomenon, Per would have to incorporate Improvement
>of Process and would also have to model Time better. In "Money flow to
>and from the steps in the production chain," for example, one step is on
>the left, and the next step is on the right, but payments to individuals
>(Consumers) is in the no-man's-land between them. Yet payments to
>individuals should be synchronous with each production step, and that
>should be compared to "step 1" Costs for goods going on the market at that
>moment.
The production chain illustrated is valid during a short time, shorter the
more accurate you would like the description to become. The changes in the
production process are illustrated (not visible) by the actual difference
of the production chains from one time interval to the next time interval.
All payments to consumers during a time interval are the sum of payments to
consumer from each production step during the actual time interval. The
time interval could be a month for a crude model, a time interval of a week
would be slightly more accurate, a day still better. But in principle we
could have time intervals of seconds or even microseconds in order to get a
very accurate description of the money flows.
The payments from the consumers to step 1 during the actual time interval
are to be compared to the payments from all the different production steps
during the same time interval. The practical adjustments for timing
differences of payments are adsorbed by the flows to and from cash storages
and to and from banks accounts. If we have "short" time intervals compared
to the average time interval between payments of wages and salaries, there
will obviously be payments from consumers to production step 1 without a
similar size of outpayment of money to the consumers from the production
steps. The contrary will happen at the time interval when most of the wages
and salaries are paid.
>Conceptually, I think part of the problem is that Per illustrates payments
>as made to "steps," i.e., to a preceding time. But of course, they are
>not made to "steps," they are made to companies existing in the present
>time, to reimburse Costs from a preceding time.
All the payments in the production steps are made during the same time
interval, i.e. the same day, hour or minute etc. In that sense they are
almost synchronous if the time interval is short enough.
>I would suggest clearly making synchronous periods in vertical columns. I
>would also have Banks as a horizontal element at the top extending the
>entire width of the chart, with money cycling down from, and back up to,
>the Banks in every synchronous period.
In the model, I have not bent the money flows to and from the banks and to
and from the storage of cash uppward but you can imagine that.
I welcome more questions so we can arrive to a strict logical model of the
money flows in the society, then we could make an investigation of why
there is problems with the lack of money.
>Michael
Per Almgren
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