| Subject: | Re: [socialcredit] Swanwick 2 | | Date: | Friday, December 30, 2005 21:59:06 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
Thanks, Tim.
1. Yes, and it can occur wholesale as during the great depression, which
Douglas predicted, more or less. But do we want to continue thius sort of very
harmful shambles, with wars (money paid out for armaments which are given away
free for nothing)often the only way of getting out of the problem?
2. Cost push inflation seems to be an accepted term among orthodoxy, for rises
in prices NOT caused by demand. I just think they underrate it.
3. I believe this simply shows the failure of the underlying theory that
inflation was caused mainly by demand. Anopther example of the totally
unscientific basis of the "discipline" of macro-economics.
Rergards. John R.
From: Timothy Carpenter <timbeau_hk@yahoo.co.uk>
Reply-To:
socialcredit@elistas.com
To: <socialcredit@elistas.com>
Subject: Re:
[socialcredit] Swanwick 2
Date: Thu, 29 Dec 2005 22:30:16 +0000
John,
Thanks for enlightening – I would like to clarify in return.
- I agree this might happen, but in the long term something gives somewhere
(debt, fire sale, receivership etc).
- Maybe I misunderstand the use of “cost push”. Oil rises due to a lack of oil
supply vs. demand. I did not mean money supply has been inflated per se, but
relative to oil...
- Has this to do with the forwarded costs of money and measurements that take
into account high interest rates?
- See above.
Tim
On 29/12/05 21:23, "John G Rawson"
<johngrawson@hotmail.com> wrote:
Thanks, Tim. My answer to your first is (mostly) no, for the following
reasons.
1. I often prarphrase the A+B model as stating "There are forces (or
factors) in the economy which push the prices of goods beyond the level of
purchasing power available to the public". I know this is hypothetical, but
Douglas' analyses demonstrated it a fact in all cases reviewed.
2. I fail to see
how rising oil prices are a result of inflated money supply. They often
accompany the opposite.
3. Statistics in NZ show that inflation was more or less
at its worst when credit squeezes were reducing the ratio of money in circulation
to GDP to half or less of its level to start with.
4. This is also backed by the
observation that increases in interest rates may reduce some prices temporarily
by "fire sales" from bankrupt businesses,
but otherwise add costs to the production stream.
I think the whole concept is
a con (consciously or otherwise) by those who create money to increase their
profits.
(I'm cynical!) Regards. John R.
From: Timothy Carpenter <timbeau_hk@yahoo.co.uk>
Reply-To:
socialcredit@elistas.com
To: <socialcredit@elistas.com>
Subject: Re:
[socialcredit] Swanwick 2
Date: Thu, 29 Dec 2005 16:30:52 +0000
Thanks all
for taking the time for reading and replying.
Firstly, to John, I do not
discount the “cost push” factor, but then again, is that often the manifestation
of a previous cycle’s “demand inflation”?
One must remember that one set of
goods can have inflation while another may deflate and end up being sold for less
than cost. If the amount of spending power is finite in trad economies, it might
suggest, if there were not the ever-present source of debt, that one might well
balance out the other (?).
Peter H: To clarify ‘shelf life’ etc, it would be
sensible to say that if a product is created for sale,
offered but not sold and then degrades/rots or is otherwise rendered unsellable,
then it is written off with no change in the money situation. Even if it took
money to be created, that money is not ‘lost’, but was spent into the economy to
pay suppliers and wages of any persons employed in production. If it was created
by the formation of a debt, well, let us see, that debt itself would be either
written off or repaid somehow by that created money that has been introducted
into the economy by the manufacture of the product that was unsold and written
off (interest aside) as part of higher overheads (wasteage/losses etc) of the
producer.
If the product WAS sold into the economy, then it gets messier, as
then we are into the issue of repaying not just the debt/investment but the
margin also in advance of that margin being spent. In some ways I think this is
more important than
past costs – people charging more than cost before the money exists to spend on
that “new” margin.
I also believe there is an issue to be appreciated in terms
of lag between demand and ND providing liquidity, which is why I left it open –
dynamics are very important IMHO. It will be hard to collate and manage all the
micro-transactions and actions of production. Any lag will either cause a
shortfall or surplus in liquidity with the traditional effects and rebound when
the correction finally arrives. Withdrawal, as you suggest, can be very hard to
implement unless we speak of a going concern where it is only the delta that
needs to be managed (?).
(Joe replies:-) <snip> You've simply transferred
some goods, and perhaps, though probably not noticeably, altered the ratio
between goods in existence and money in existence. There are
now more goods. But the same amount of money. Which might, but in most cases
such as we're considering here, probably won't allow each pound, or dollar, or
whatever, to buy more
Indeed it will not necessarily allow each pound to buy
more, and the point here is my ‘cost’ is all margin, i.e. A price that has
not been formed from monies already disbursed in the form of payment to suppliers
and labour! If it DOES allow each pound to buy more, i.e. Due to increased supply
of goods vs money, then that dents the need for ND somewhat. What I would say is
that it may not alter the ability for a pound to buy more, but it might end up
making another supplier lose money on THEIR goods in a finite market, i.e. They
lose to “make room” for people to spend their money on this new costless
margin-only product.
(Joe
replies:-) If you produced 'for nothing', NO 'money' was ever created by a
bank in respect of your product. And no 'money' will be destroyed when, or if,
you get your price for it. Certainly not through your repayment to the bank of
that which you never borrowed.. Whether you get that price or not depends on
whether anyone is willing to exchange money they have got from someone else for
it. Money which most probably did originate as 'debt' at sometime past, but
really has nothing to do with the 'cost' of your product, which is monetarily
'costless' even though it is no doubt an 'asset' to which you can attach a
'price value' expressed in money.
Although it is monetarily ‘costless’, a
margin is likely to be applied – this margin is taking money OUT of the economy
before it has EVER been spent INTO it.
Tim
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