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But if you define "inflation" simply as "rising
prices", and yet those prices are being paid, you'd have to also have a rise in
the amount of money or credit available from which they could be paid, would you
not? For if the upper limit of price is what any article will 'fetch', it
certainly can't 'fetch' something that doesn't exist or won't be created.
Doesn't that bring us right back to the definition of "inflation" that Douglas
used?
Regards,
Joe
----- Original Message -----
Sent: Monday, July 28, 2008 1:40 PM
Subject: RE: [socialcredit] the
non-neutrality of money
Sorry, Wally. I see that as a highly intelligent comment
on inflation and its causes but not a definition per se.
Inflation these
days is measured simply as "rising prices", with no other parameters
considered in the measurement. Ever, to my knowledge. Therefore
its only precise definition can be just that, "rising prices". (Or the
equivalent, depregiating value of money.)
This is not just a personal
comment. The SC movement in NZ has held this view for about fifty
years.
Regards.
John R.
From: wmklinck@shaw.ca
To: socialcredit@elistas.com
Date: Mon, 28 Jul
2008 02:39:50 -0600
Subject: Re: [socialcredit] the non-neutrality of
money
The following comments by C. H. Douglas pertaining to inflation
were received from an associate during private e-mail exchanges:
The best
definition of inflation I've seen was written by C.H. Douglas in his book
"Economic Democracy" as follows:
"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 sums distributed in advance of the completion of
large works (or sums distributed for the production of destruction - i.e.
war), 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 in purchasing power.
The
reason that the decrease in the consumer's purchasing power has not been so
great as would be suggested by these considerations is, of course, largely due
to intrinsic cheapening processes which would, if not defeated by
this dilution of the consumer's purchasing power, have brought down prices
faster than they have risen.
There are thus two processes at work; an intrinsic cheapening of
the product by better methods, and an artificial decrease in purchasing
power due to what is in effect charging of the cost of all waste and
inefficiency to the consumer. And it is clear under this system the
greater the volume of production the larger will be the absolute value of
waste which the consumer has to pay for (war being the ultimate form of
waste), whether he will or no, because as the bank credits are created at the
instance of manufacture, and repaid out of prices, each article produced
dilutes, by the ratio of its book price to all credits outstanding, the
absolute purchasing power of money held by any
individual."
C.H.
Douglas "Economic Democracy" 5th edition pge 73-74 (parenthesis
added)
[Correspondent's comment]: From a Social Credit point of
view, the massive waste taking place due the Bush's deficit financed
military adventures , and the wages that have been distributed in respect of
this wasteful production, have all gone to inflate the prices of consumer
goods like gasoline and food.
On 26-Jul-08, at 9:12 PM, Martin Hattersley wrote:
When I worked on research in Ottawa, I spent a good deal of time
analyzing
the connection between cash flows in the economy and changes
in the price
index, and I satisfied myself that there was a definite
connection between
the two, which could be demonstrated by an
examination of the statistics
over a period of more than 55
years.
I attach the relevant part of my brief to the Macdonald Royal
Commission in
that regard, and if anyone wishes to punch holes in it,
please feel free to
express your opinions.
Martin Hattersley,
5929-189 St.,
EDMONTON AB CANADA T6M 2J1
Phone (780)
483-5442
e-mail <jmartinh@shaw.ca>
-----
Original Message -----
From: "John G Rawson" <johngrawson@hotmail.com>
To:
<socialcredit@elistas.com>
Sent:
Saturday, July 26, 2008 4:50 PM
Subject: RE: [socialcredit] the
non-neutrality of money
I sugggest this argument needs to go
back and resolve the definition of
inflation, because it has assumed
that it is necessarily caused by increase
of the money
supply.
Inflation these days is determined by measuring increased prices,
with no
reference whatever to the money supply. Therefore its only
practical
definition can be "Rising prices".
Orthodox economists
recognise both demand-pull inflation caused by undue
increase in
purchasing power and cost-push inflation caused by, for example,
rising
oil prices which may generate no immediate increase in retail buying
ability. A corollary of the A+B model is that cost-push inflation is
endemic
to the system.
It is a pity to see Social Crediters "suckered
into" the prime argument of
the finance industry against monetary
reform, i.e. the supposed inflationary
effects of any
change.
Regards.
John R.> Date: Sat, 26 Jul 2008 09:59:29 -0700>
From:
william_b_ryan@yahoo.com> To:
socialcredit@elistas.com>
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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