| Subject: | Re: [socialcredit] Swanwick 2 | | Date: | Saturday, December 24, 2005 08:03:08 (-0800) | | From: | Joe Thomson <thomsonhiyu @....ca>
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(John Rawson
wrote;-) "Savings represent reduction in use of potential purchasing
power. And presumably there are others who would like to consume the
(goods) available so that they are not wasted? To put it another way,
more savings cause greater 'gap' allowing more room for new consumer credits?"
(John)
(Michael Lane replies:-) Still not good. We're not talking
about INVESTING savings at the moment, at least you didn't say so.
Saving in and of itself is just deferring consumption. It sends a signal
to production to slow, but no goods are wasted (they would be if production
FAILED to slow), and it creates no gap to fill.
(Joe replies:-) Still not
complete. While 'savings', which have been 'costed' into goods in
existence, are deferred consumption in respect of those goods, if those
'savings' are used to purchase consumer goods not yet in
existence do they not then form the 'costs' of those future consumer
goods? The same as if a bank were to issue another loan in respect of
them?
A car dealer may have an existing inventory of
new vehicles on his lot awaiting purchase, and a beginning of the 'cost
liquidation' process. But if his customer doesn't see what he likes 'in
stock', and orders one to be built to his preference instead, which
he's going to pay cash for from his 'savings', has not the amount spent from
those savings just become the 'costs' of his future car? No longer are
those savings available to help liquidate the costs of the existing
inventory. Which, in the 'macroeconomic' sense, cannot be liquidated
unless there are 'new credits' issued in respect of the amount of savings
spent on 'new production'.
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