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(John Rawson wrote:-) " .....any more than the money supply is
measured to get our price index."
Hi John,
It may not be 'measured' to get your price index, but how
can a rise in prices be met if there's nothing to meet it
with? Again, aren't we back to what Douglas said?
Aside from that though, I think we're missing
something here. We're not looking at what goes on
overall between credit issue and useful productive capacity as an
ongoing 'ratio' in the WHOLE economy, but are focussing instead on the
'money supply' measured in dollars, and the 'price index' measured the same
way.
In Douglas's description of 'inflation' it is "...an
expansion of money for the same or a diminishing amount of goods", whereas
'deflation' is "an expansion of goods for the same or a
diminishing amount of money."
With things as they are, we can't help but have
ongoing 'inflation' since existing "useful productive capacity" is
intermittantly choked off short of its ability to supply "real" demand by
having sufficient "effective demand" that's totally dependent on there
being continual expansions of unrepayable debt.
Glad to hear you had a good holiday. Weather
here has been nice, not too hot in daytime yet, and cools off nicely at
night. Our counter-cyclical position in lumber industry running true
to form, business has been pretty good.
Regards,
Joe
----- Original Message -----
Sent: Sunday, August 03, 2008 2:49
AM
Subject: RE: [socialcredit] the
non-neutrality of money
Hi, Joe. The crux of your comment lies in your "if",
which may or not occur. I won't define a cabbage, because we observe it in its
many characteristics rather than using a direct measurement. But I never heard
of a greengrocer (or a supermarket) enquiring how much manure (or moisture, or
% of CO2 in the air, or etc.) had been used to make it grow so well. We don't
measure that, any more than the money supply is measured to get our price
index.
Last month, during the school holidays, we went up to Fiji and
Vanuatu on a cruise for 12 days. NZ is just too far from anywhere. 2 days
steaming to gert to Fiji and another 2 to come back. Sure, they entertain you
well all the time, but it's a waste. Nice change, great food etc. and very
lucky with the congenial people at our dinner table. Got involved in quizzes
with Eilean, who has a fantastic repertoire of detail, and came home with
several trashy prizes that she's scheming to give to people she doesn't like.
Difficult, there aren't too many. Got into a game or two of table tennis. Last
effort with a young bloke who cleaned me out about 21:15. Then we
changed ends, and by means of a few sneaky serves and flukey backhands revived
from about 20 years ago, I had him at 7:5 to me. Then the only ball out went
overboard. Looked so lonely bobbing along 'way down there in the waves.
Had good weather most of the time. The ship is just back from its next trip,
with stories of all sorts of mayhem when they hit the big storm on route
back.
W had showery weather most of July and then at the turn of the month
a "weather bomb". Many inches of soaking rain and high winds. Then a day fine
and then another big storm, that reached right down to the middle of the South
Island. Highways cut by slips and flooding and quite a lot of damage in
places. One area got half a meter of rain from one lot. Not many problems at
home here, except that the soil just splashes when you walk on it. Never a
dull moment.
Went down to Auckland with the second stream indoor bowls
reps. today and played a few good ones among others. Good weekend. The
All Blacks thrashed the Aussie. Wallabies last night after playing miserably
the week before and losing the first test. Very controversial;. Many felt our
coach should have been replaced after the World Cup fiasco by an outstanding
bloke from the S. Island. He then got invited to coach the Australians and was
credited with their earlier victory. It would have been more than a national
disaster if we had lost yesterday. Much more important than
politics....
Hope you are all well and enjoying your summer. We'd like it
back a.s.a.p.
John R.
From: thomsonhiyu@shaw.ca
To: socialcredit@elistas.com
Date: Sat, 2 Aug
2008 07:49:21 -0700
Subject: Re: [socialcredit] the non-neutrality of
money
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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