| Subject: | RE: [socialcredit] the non-neutrality of money | | Date: | Monday, July 28, 2008 20:21:16 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
| In reply to: | Message 5477 (written by Joe Thomson) |
Surely the key point in this would be the function of the Credit Authority in deciding how much purchasing power could be put into circulation without causing demand inflation.
I guess they/it could be fallible and make mistakes, but do we have to consider this in the present context? In a theoretical discussion we need to assume not, or else we have to bring in the chance of national disaster, global warming, and all sorts of other side issues.
Regards,
John R.
> From: thomsonhiyu@shaw.ca
> To: socialcredit@elistas.com
> Date: Mon, 28 Jul 2008 08:12:03 -0700
> Subject: Re: [socialcredit] the non-neutrality of money
>
> Bill Ryan wrote:-"Far less inflationary are the Social Credit dividend and
> retail discount programs, where new credit is rationally introduced at the
> point of retail rather than directly as loans for investment."
>
> Joe replies:- You say "far less inflationary..", Bill. But even with the
> Social Credit dividend and retail discount in place we would still see some
> ongoing 'inflation'?
>
> In other words, you see prices in general still rising over time but with
> the ND and CPD overall consumer incomes are at least keeping pace?
>
> If this is the case, then that would mean the 'deflation' of prices that
> Douglas was talking about would have to be considered somewhat differently
> than the way many of us have probably thought of it. But, it would make
> sense, since if the price of articles for sale were 'falling' as previously
> envisioned, there wouldn't be much incentive to buy, but to wait as long as
> possible for them to fall further.
>
>
> ----- Original Message -----
> From: <william_b_ryan@yahoo.com>
> To: <socialcredit@elistas.com>
> Sent: Saturday, July 26, 2008 9:59 AM
> Subject: [socialcredit] the non-neutrality of money
>
>
> > "...from a financial point of view, the money supply has been inflated,
> and the community as a whole has therefore paid for the new capital through
> the loss in value of their monetary holdings. While the capital is being
> created (say the many years spent constructing a new oilsands plant), no new
> wealth is available for consumers."
> > ---------------------------------------------------------
> >
> > Quite obviously no new wealth is created by the particular plant until it
> is completed and in production. But this statement of yours falsely assumes
> that money is neutral, that the only thing an increasing money supply causes
> is increasing prices.
> >
> > In reality, while the construction of the plant is being financed with new
> credit, the rate of profit by other firms is increasing with the increasing
> spending, inducing the increasing production of real goods and services into
> final consumption. The problem of inflation has more to do with the way new
> credit is introduced than the fact that it is introduced.
> >
> > In Social Credit theory, the ratio of A is naturally falling to B with
> labor displacement, so the ratio of A to A + B, the costs of production in
> double entry accounting, is falling, causing a continual long-term fall to
> the rate of profit, continually suppressing production in terms of
> productive potential and real demand.
> >
> > The rate of investment is A + B. If A + B is accommodated through new
> loans, the ratio of A to A + B is increased (rather than decreased) if the
> flow of A + B is accelerating, and therefore the rate of profit is
> increased, since A + B is expensed against sales after a delay, while A
> refluxes into retail sales rather quickly. So the stimulus of an increasing
> A takes effect before the consequent expensing of an increasing A + B. But
> this stimulative effect continues only so long as the flow of A + B is
> accelerating. This means that prices are exponentially increasing
> eventually into hyperinflation, if not stopped. But while it lasts the
> stimulating effect is very real, in terms of real production and
> consumption. Look at Douglas's 1923 testimony in Ottawa on the Austrian
> inflation.
> > http://www.geocities.com/socredus/Douglas_1923_second_day_Part_3.txt
> >
> > Far less inflationary are the Social Credit dividend and retail discount
> programs, where new credit is rationally introduced at the point of retail
> rather than directly as loans for investment. In the Social Credit program,
> more and more investment is financed from retained profits rather than
> loans. Prices are therefore ameliorated rather than exacerbated.
> >
> > Some statements from Douglas regarding the non-neutrality of money:
> >
> > "...the true assets of banks collectively consist of the difference
> between the total amount of legal tender, or Government money, which exists,
> and the total amount of bank credit money, not only which does exist, but
> which might exist, and which is kept out of existence by the fiat of the
> banking executive."
> > Swanwick, 1924.
> > http://geocities.com/socredus/compendium/swanwick1924.txt
> >
> > "The business of a modern and effective financial system is to issue
> credit to the consumer, up to the limit of the productive capacity of the
> producer, so that either the consumer's real demand is satiated, or the
> producers' capacity is exhausted, whichever happens first."
> > Chapter X, *Credit-Power and Democracy*, 1920.
> > http://geocities.com/socredus/compendium/chapter10.txt
> >
> >
> >
> > ---------------------------------------------------------------------
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>
> ---------------------------------------------------------------------
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