| Subject: | [socialcredit] Fw: from Jim Schroeder | | Date: | Monday, July 28, 2008 08:39:57 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
--- On Mon, 7/28/08, Jim <jschroeder@shaw.ca> wrote:
> From: Jim <jschroeder@shaw.ca>
> Subject: non-neutrality of money
> To: "Martin Hattersley" <jmartinh@shaw.ca>, william_b_ryan@yahoo.com
> Cc: "John G Rawson" <johngrawson@hotmail.com>
> Date: Monday, July 28, 2008, 9:07 AM
> Hi gentlemen:
>
> I noticed you were having an interesting conversation on
> elistas, and I hope you don't mind if I add my two
> cents, because I believe that you're both partially
> correct.
>
> The price elasticity of demand for consumer goods is
> usually between infinity and 0, which means that an
> increase in effective demand (money) will raise both prices
> and the quantity produced depending on the price elasticity
> of demand. However; it is unlikely that the whole of the
> increase in demand will show up in prices or quantity
> produced.
>
> We are witnessing this phenomenon in Alberta right now with
> the massive investment in the oil sands which is most likely
> being financed mostly with issuance of new credit. The price
> of some consumer goods has not risen much and this has
> caused the increase in the ability to consume these goods
> by people who's wages have risen, but some consumer
> goods, with very inelastic demand due to their being a
> necessity, and the fact that they are not able to increase
> the quantity produced rapidly (i.e. housing), have seen
> massive increases in prices (the average price of a house
> in Edmonton has more than doubled over the last few years).
>
>
> I will leave you with a quote from Economic Democracy:
>
> "All large scale business is settled on a credit
> basis. In the case of commodities in general retail demand,
> the price tends to rise above the cost limit, because the
> sums distributed in advance of completion of large works
> become effective in the retail market, while the large
> works, when completed, are paid for by an expansion of
> credit. This process involves a continuous inflation of
> currency, a rise in prices, and a consequent dilution of
> purchasing power." (C.H. Douglas "Economic
> Democracy)
>
> I agree with Martin that periods of heavy investment tend
> to be inflationary which are followed by periods with less
> investment that tend to produce a "slump". In my
> opinion this is the Social Credit explanation for the
> "business cycle", which is inevitable under
> current methods of finance.
>
> Take care.
>
> Jim Schroeder
>
> http://social-credit.blogspot.com/
|
Fw: from Jim Schro
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