| Subject: | [socialcredit] An Inflation Case Study | | Date: | Saturday, March 11, 2006 17:08:06 (-0800) | | From: | Jeffery Smith <jjs @.........org>
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| In reply to: | Message 3614 (written by Daniel Morin) |
On Mar 11, 2006, at 8:49 AM, Daniel Morin wrote:
>
> Joe, your reality is misinterpreting the facts. For instance, it is a
> fact that prices have been steadily declining when the money supply
> was stable. The reason why prices are declining is because of
> increase in productivity. Today, we have better equipment, machinery
> and technology, and we can produce more with less labor. Some of the
> benefits of this productivity increase goes to the producer (higher
> profit), however most of the benefits is passed to the consumer by
> selling the same product (or service) at a lower cost because of
> competition. People and businesses don't go out of business because
> prices are failing. If so, how do you explain prices of computers
> going down while profits of the computer industry being record high?
> Also, how would you explain higher bankruptcy rate when inflation is
> high. If raising prices would help businesses, then there should have
> seen the lowest number of bankruptcies in 1980 and 1981. By the way,
> every industry could experience a price decline according to their
> rate of productivity. Computer product prices decline faster because
> the industry makes faster improvements.
Well said.
> A recession is caused by a reduction of the money supply. This is why
> prices are declining. Recessions are bad. Remember, that I advocate
> a stable money supply.
Relative to what, if anything?
> new money is inflating the money supply and causing prices to rise.
> This is why prices of houses, cars and everything else goes up. If
> there was an equilibrium between borrowing and savings, prices would
> never go up and people could afford much better housing. There would
> be no need to 'offset' a problem that does not exist.
Well put.
> The flawed money system is the central bank and should be removed.
Hear, hear. Yet, replaced with what? Community currencies nested in a
cooperative hierarchy?
SMITH, Jeffery J., President, Forum on Geonomics
7536 SE Milwaukie Av, Portland Oregon 97202 USA
503/232-1337; jjs@geonomics.org; www.geonomics.org
Share Earth's worth to prosper and conserve.
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An Inflation Case 
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