| Subject: | [socialcredit] Fw: Re: from Jim Schroeder | | Date: | Monday, July 28, 2008 08:41:09 (-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: Re: 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, 10:23 AM
> Hi again:
>
> I said price elasticity of demand in my email, but I meant
> price elasticity of supply.
>
> Sorry for the confusion.
>
>
> Jim Schroeder
>
> http://social-credit.blogspot.com/
>
>
> ----- Original Message -----
> From: Jim
> To: Martin Hattersley ; william_b_ryan@yahoo.com
> Cc: John G Rawson
> Sent: Monday, July 28, 2008 8:07 AM
> Subject: non-neutrality of money
>
>
> 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/
|
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