| Subject: | Re: [socialcredit] Finance: Credit "Crisis" and "Depression" | | Date: | Sunday, December 7, 2008 10:39:26 (-0800) | | From: | Joe Thomson <thomsonhiyu @....ca>
|
| In reply to: | Message 5752 (written by John G Rawson) |
|
(John Rawson wrote:-) That's just the point I am making, Joe.
The public may not get it cheaper, they may not even get it as cheap, because
smart businessmen are grabbing the extra.
(Joe replies:-) I'm afraid I don't follow that at
all, John. Just how are "smart businessmen" able to do that?
"Grabbing the extra", I mean?
If the customer pays the regular price, whatever that
may be from store to store, and is susequently rebated a percentage of it
through the CPD, I don't see how anybody in business could be "grabbing the
extra".
Except through the likelihood that there will be an
increase in the volume of sales. Which is what we'd expect to happen as
the effective price to the customer is reduced through the rebate, and his
dollar goes further.
If it's true that "unit cost is a function of
volume" in manufacturing, then does it not stand to reason that "unit PRICE" ~
what a merchant may sell an item for, and still make a profit~ would be a
"function of volume", too?
If that's not true, then how do the large
supermarkets, which certainly have much higher capital and operating costs on
a straight 'dollar' basis than any 'mom and pop' corner grocery does,
manage to sell their groceries for a fraction of the price that 'mom and
pop' can, and yet make a far greater profit?
Their margins may be only a few pennies on the dollar, yet through
the volume they turnover those pennies add up to greater returns. If
they can increase their volume further through the CPD, might we not
reasonably expect their prices on many items might even be lower still?
(John continues:-) I am taking the assumption that purchasing
power will balance with goods; That is basic SC. Conditions will change if
so. .Let's try to get away from assertions that this or that will happen
withojut logic behind them. We need to get down to how they will
happen.
(Joe replies:-) Well, if you try to equate
purchasing power to consumer goods prices by 'spending money into
circulation' that's created by your Reserve Bank for new
'infrastructure', even if it's 'interest-free', you're going to
raise prices.
Some will be able to afford them, but over time, an
increasing number will not. You'll be back to an ongoing 'inflation',
and all the distortions of things like house prices that brings, as well as
the necessity to find more ways to tax incomes that are still insufficient
overall to fully liquidate total costs.
If you went instead to the CPD route, you are
leaving money in the hands of the consumer on every sale, so long as overall
capacity to produce exceeds actual overall consumption.
Some of that money he may well elect to have
spent on 'infrastructure', since the foregoing of a part of his rebate
now will lead to larger rebates in the future. That's if the
infrastructure is actually useful, and adds to the productive capacity and
'real credit' of the community.
From: thomsonhiyu@shaw.ca
To: socialcredit@elistas.com
Date: Tue, 2
Dec 2008 23:01:56 -0800
Subject: Re: [socialcredit] Finance: Credit
"Crisis" and "Depression"
(John Rawson wrote:-) However, there would be
nothing to stop customers accepting higher prices because "their govt." is
going to refund part.
(Joe replies:-) Customers, as
individuals, can "accept" or "reject" whatever they want.
But if, through the CPD, they still get the product cheaper than they did
before, how can that possibly be 'inflationary'?
And ask yourself this, if the individual business
supplying some product does greatly become more profitable,
and it doesn't have any competition, how long before it gets
some?
Just look at all the things people try to supply the
public in competition with one another now. Trying to make, or
peddle, things that couldn't be any more than marginally profitable, at
best. (One of the reasons so many new businesses fail within the
first three years of opening.)
(John continues:-) I don't know how to start until
someone tells me just how competition would overcome the problem in
a sellers market. Or is SC going to put just slightly less than
equated purch. power into circulation to preserve a buyers market? I
have never seen that postulated.
(Joe replies:-) An across-the-board "sellers'
market" must mean that the public already has enough money in its hands,
overall, to fully meet prices asked for the goods it wants to consume.
Otherwise, how could you have a "sellers' market" ? In such a
scenario you do not need a "discount". But lets look at what induced
that scenario.
Likely nowadays, the public's got that
money either through increases in consumer credit advanced for things like new
home mortgages. Or from the excess of production of 'capital
goods', or other goods that don't come with the normal buying range of the
public ~ "exports", "armaments", "infrastructure", etc. ~ over
'consumer goods'.
As regards that latter, we'd have to ask ourselves
whether the production of these things are necessary or desirable in their own
right, or whether we're just engaging in another "guns before butter"
exercise to provide an excuse for "employment", and the illusion of prosperity
such a "sellers' market" ususally creates.
If the production of 'consumer goods' is made to exceed
that of 'capital goods', which it properly should with an implementation
of Social Credit, since there is then always an "effective demand" for
those goods (through the macro-economic accounting adjustments of the ND and
CPD) WITHOUT having to produce MORE 'CAPITAL GOODS', we are then able to
produce consumer goods to the full limit of actual capacity, or the satiation
of actual consumer demand, whichever comes first. And we eliminate the
"boom and bust" cycles of "sellers' " and
"buyers' " markets.
The "price" to the consumer, of all consumer goods, is
thereby adjusted to reflect the true "costs of production"~ which, to him, is
the "Just Price". The only one, in reality, he CAN
pay.
----- Original Message -----
Sent: Tuesday, December 02, 2008 12:28
PM
Subject: RE: [socialcredit] Finance:
Credit "Crisis" and "Depression"
I hadn't thought of that mechanism. Everyone (in
Douglas day) collecting a paper chase of invoices and taking them to their
bank periodically. I can visualise divorces when wife forgets to keep
invoices!
Probably easier now if everyone uses credit cards.
However,
there would be nothing to stop customers accepting higher prices because
"ther govt." is going to refund part.
We have reached an impasse. I aver
that it could allow inflation of prices, and I give reasons. Others aver it
would not, through competition, without giving reasons.
We need to go
further into the matter, but I don't know how to start until someone tells
me just how competition would overcome the problem in a sellers market.
Or is SC going to put just slightly less than equated purch.
power into circulation to preserve a buyers market? I have never seen
that postulated.
Regards.
John R.
>
Date: Mon, 1 Dec 2008 13:55:22 -0800
> From:
william_b_ryan@yahoo.com
> To: socialcredit@elistas.com
>
Subject: RE: [socialcredit] Finance: Credit "Crisis" and
"Depression"
>
> "Others insist that it shall be a discount of
a certain percentage of the price, whatever it is. Which, to me, in the
sellers market that SC would establish, would lay the situation completely
open to profiteering."
>
---------------------------------------------------------
>
--------------------------------------------------------
>
> A
fixed-percentage discount off the varying price is how Douglas proposed it.
Why and how could this lead to profiteering? Douglas proposed that it be
paid directly to consumers as a rebate on their sales invoices, lowering the
effective price of their purchases. Why do you think this would create a
"sellers' market"? One intended effect would be to increase the rate of
profit, thereby increasing the quantity and array of products and services
reaching the point of retail, inasmuch as more production would be
profitable than otherwise would be the case, which is hardly "profiteering."
I don't believe it is a particularly difficult concept to understand. And it
would be a very powerful tool to combat the current recession.
>
> I believe that the Fed could legally send out checks right now, in
dividends and rebates directly to final consumers, without additional
implementing legislation. I believe they already have the legal authority to
do so.
>
> Instead, it is creating hundreds of billions of
dollars in new money in its stimulus program to purchase various securities,
and in various loan programs, as Chairman Bernanke said in his speech in
Austin earlier today. It is the extension of the "trickle down from Wall
Street" program they have always followed, in their "pushing on a string"
effort to respond to changing circumstances. I've appended the AP report of
that speech below:
>
---------------------------------------------------------
>
>
F-A-I-R U-S-E C-L-A-I-M-E-D
>
> December 1, 2008
>
Bernanke: lower interest rates are "feasible"
> By JEANNINE AVERSA, AP
Economics Writer Jeannine Aversa, Ap Economics Writer
>
>
WASHINGTON – Federal Reserve Chairman Ben Bernanke said Monday that further
interest-rate cuts are "certainly feasible," but he warned there are limits
to how much such action would revive an economy likely to stay weak well
into next year.
>
> The Fed's key interest rate now stands at 1
percent, a level seen only once before in the last half-century. To help
lift the country out of a recession that started in December of last year,
many economists predict Bernanke and his colleagues will drop the rate again
at their next meeting on Dec. 15-16.
>
> Bernanke spoke just
hours after the National Bureau of Economic Research announced that the U.S.
economy has been in a recession since December 2007.
>
> He
didn't mention the NBER's finding in his speech to business leaders in
Austin, Texas, nor in answering questions afterward. However, Bernanke
warned that the economy likely will remain stuck in a slump.
>
> "Even if the functioning of financial markets continues to improve,
economic conditions will probably remain weak for a time," he said.
>
> In his speech, Bernanke noted that the bracing impact of the Fed's
aggressive rate reductions has been somewhat stymied by the worst credit and
financial crises to hit the world economy since the 1930s. Despite lower
borrowing costs ordered by the Fed, skittish banks have been reluctant to
lend money to people and businesses, a vicious cycle that has seriously
hobbled the U.S. economy.
>
> "Although further reductions ...
are certainly feasible, at this point the scope for using conventional
interest rate policies to support the economy is obviously limited,"
Bernanke said in the speech. The Fed can lower its key rate only so far — to
zero — and it's getting ever closer to that threshold.
>
>
Bernanke said there are other ways that the Fed might bolster economic
activity.
>
> The Fed, for instance, could buy longer-term
Treasury or agency securities on the open market in substantial quantities,
he said. This might lower rates on these securities, "thus helping to spur
aggregate demand," Bernanke said.
>
> Given the limits to how
low the Fed can go in reducing interest rates, the central bank over the
past year has resorted to a flurry of other radical — and often
unprecedented actions — with the hope of busting through credit jams and
getting financial markets operating more normally.
>
> It has
ramped up cash and other types of loans to financial institutions, started
buying mounds of short-term debt that companies rely on for day-to-day
operations like paying salaries and buying supplies, and expanded its
emergency lending program to investment firms.
>
> Just last
week the Fed announced two new programs aimed at increasing the availability
and lowering the costs of credit card loans, auto loans, student loans and
home mortgages.
>
> The Fed last week said it would purchase
$200 billion in securities backed by different types of consumer debt. That
market essentially froze in October, making such loans harder to obtain
while carrying higher interest rates.
>
> The Fed also said it
would spend $500 billion to purchase mortgage-backed securities guaranteed
by mortgage giants Fannie Mae and Freddie Mac, and another $100 billion to
directly purchase mortgages held by Fannie, Freddie and the Federal Home
Loan Banks.
>
> Bernanke said the Fed will continue to look for
innovative ways to break through the credit logjams.
>
> "We at
the Federal Reserve and our colleagues at other federal agencies will
carefully monitor the conditions of all key financial institutions and stand
ready to act as needed to preserve their viability in this difficult
financial environment," Bernanke said.
>
> The NBER — a
private, nonprofit research organization — said its group of academic
economists who determine business cycles met on Friday and decided that the
country tipped into recession in December 2007. The economy contracted in
the final quarter of last year.
>
> The economy jolted into
reverse again in the summer. Many economists predict it is still shrinking
now and will continue to do so through the first quarter of next
year.
>
> Consumers — major shapers of national economic
activity — likely will keep cutting back on their spending, he said
Consumers have been reeling from job losses, hard-to-get credit and hits to
their wealth from sinking home values and tanking portfolio
investments.
>
> In October, the unemployment rate zoomed to
6.5 percent, a 14-year high. So far this year, 1.2 million positions have
disappeared. The jobless rate is likely to climb to 8 percent or higher next
year.
>
> A student of the Great Depression, Bernanke said the
current period of economic woe bears "no comparison in terms of severity" to
the 1930s.
>
> ____
>
> AP Business Writer John
Porretto contributed to this report from Austin.
>
>
>
----------------original message------------------
>
> RE:
[socialcredit] Finance: Credit "Crisis" and "Depression"
> Monday,
December 1, 2008 1:46 PM
> From: "John G Rawson"
<johngrawson@hotmail.com>
> To: "Socred elistas"
<socialcredit@elistas.com>
>
> This discussion is purely
with the mechanism of paying it, for which I see no problems and several
solutions, but:
>
> Martin uses the term "just price" which
implies conditions for its payment, i.e. a means of containing price
inflation. How do we establish "just prices" for a multitude's multitude of
items, each in different parts of a country each with different transport
costs, local taxes, etc?
>
> Others insist that it shall be a
discount of a certain percentage of the price, whatever it is. Which, to me,
in the sellers market that SC would establish, would lay the situation
completely open to profiteering.
> A bureaucratic nightmare to beat
all socialist efforts anywhere, or uncontrolled inflation?
>
>
If someone can answer these points, I too will favour the system. But I've
been asking for these answers for decades now.
>
> John
R.
>
>
>
>
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