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Money Creation (was Re: Land and Depression)

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  • Walter Horn
    Akh, sorry. I can see why you re annoyed. But I didn t mean to leave out any of your titles! I d meant to say: All hail the relevance determiner and board
    Message 1 of 150 , Oct 31, 2008
      Akh, sorry. I can see why you're annoyed. But I didn't mean to
      leave out any of your titles! I'd meant to say:

      "All hail the relevance determiner and board diagnostician!"

      I'll try not to let it happen again, boss.


      --- In LandCafe@yahoogroups.com, "Dan Sullivan" <pimann@...> wrote:
      > On 31 Oct 2008 at 14:09, Walter Horn wrote:
      > > Right. I suppose I could make comments from on high about what
      > > and is not "relevant."
      > Or you could have a proctologist remove the bug.
      > -ds
    • Roy Langston
      ... Exactly. A piece of paper (check) would merely have been another way to effect the same end: transferring money from my bank account to the vendor s. ...
      Message 150 of 150 , Nov 1, 2008
        Harry Pollard wrote:

        >Your transaction at the ATM was simply an electronic
        >version of something written on paper, with your pin
        >number taking the place of a signature.

        Exactly. A piece of paper (check) would merely have
        been another way to effect the same end: transferring
        money from my bank account to the vendor's.

        >However you would not purchasing anything.

        But I was. I was purchasing the gas, electricity and
        phone service I paid for. I'm not sure how you are
        able to prevent yourself from knowing that fact.

        >You were simply withdrawing dollar bills from your

        No, of course that is false, as you know. There were
        no dollar bills involved, and I did not merely withdraw
        money: I _transferred_ it to the vendors' accounts to
        pay for the utility services I had received.

        >You did this because you were unable to use your bank
        >deposit to purchase anything -- something you can do
        >with the dollar bills, which are money.

        But as you know, I _did_ use the bank deposit to pay
        for the utility services I had received. Therefore,
        I must have been _able_ to do so, and the bank deposit
        balances I transferred to the utility companies
        therefore _were_ money.

        >You answered:

        >>>HP: That's because I use the accepted (by informed people)
        >>>functions of money - a 'measure of value' and a 'medium
        >>>of exchange'. A bank deposit is neither.

        >>"It is both. It is broadly accepted in exchange, and the
        >>outstanding balance measures quite precisely the value
        >>of what it can be exchanged for. Your claims continue
        >>to be provably false."

        >I must say I have never seen a bank deposit being presented
        >at Wal-Mart in order to buy something.

        Of course not. Buying something at Wal-Mart with a bank
        deposit does not require it to be "presented." It just
        requires a reliable transfer of the required amount of
        money from the buyer's account to Wal-Mart's. You know
        this. You just refuse to know it, because it proves that
        your beliefs are false.

        >I have seen checks presented, I have seen credit cards
        >used, I have seen cash passed across the counter, I have
        >never seen a bank deposit trundled up to the cash register.

        Never seen a debit card used to buy anything?

        >I will repeat. Bank deposits are not an exchange medium.

        I will repeat: that is an equivocation. Bank deposits
        _consist_of_ the exchange medium, but are not themselves
        the medium, just as a bin full of yardsticks is not itself
        a measure of length. I'm not sure there is any clearer
        way to explain that to you.

        >Neither are they a measure of value.

        As I explained to you in my previous message, you are
        equivocating by using two different sense of the verb
        "to be." Bank deposits "are" money in the sense that
        they _consist_of_ money, not in the sense that each
        deposit "is" one unit of money.

        It's like I'm saying, "If global warming melts the
        Greenland ice cap, the water level in the oceans will
        rise 20 feet." And you say, "But where would all the
        additional water come from? Ice isn't water, you know.
        If I order a whiskey with water, and they give me a
        whiskey with ice, they haven't given me the drink I
        ordered. You can't drink ice!"

        Well, it's true that in one sense, ice "is not" water:
        you can't drink it, swim in it, etc. But ice does
        _consist_of_ water. In exactly the same way, bank
        deposits "are not" money only in the sense that you
        can't go into a store, count out some number of bank
        deposits, pass them to the cashier, and buy a pack of
        gum. But that is not what we mean by "bank deposits
        'are' money."

        >They are, however, denominated (as you put it) in the
        >real measure of value -- the dollar.

        <sigh> A 50-foot tape measure is just as "real" a
        measure of length as a one-foot ruler; and similarly,
        $50 in a checking account is just as real a measure
        of value as a $1 bill. They just measure different
        _amounts_ of value, same as the ruler measures a
        different _amount_ of length from the 50-foot tape.

        And if you cut the tape in half, it is still a good,
        reliable, standard measure of length, just as the bank
        deposit still measures value even if you withdraw $25
        from it. The accuracy of the measure is not affected,
        just the _amount_ measured.

        I have never understood how people are able to prevent
        themselves from knowing such self-evident facts. But
        I know that when it is required for the preservation
        of their false beliefs, they are able to do it somehow.

        A lot.

        >Perhaps you are confused by the artificial separations
        >of "monies" used by economists for specific statistical

        No. I am just willing to know some facts which you
        seem to have decided not to know.

        >You must remember that economists do not really discuss
        >money, rather they talk about "M's" - their contrived
        >statistical elements.

        The Ms are just terms for different sorts of money, same
        as "tap water," "potable water," "fresh water," "sea
        water," "ice," and "water vapor" are all just different
        terms for different sorts of water. You have just
        decided that because sea water, water vapor and ice
        cannot be used directly to irrigate crops, they aren't

        >M0 is probably closest to "money as a measure of value".

        So if exchange became entirely electronic, and there were
        no more pieces of paper to represent $1 each, there would
        be no measure of value?

        >They include bank deposits in M1 but then they can do
        >as they wish. It doesn't make it right - or sensible.
        >It is done for the purposes of their arcane science.

        Not every proposition of which is false, nor definition

        >Bank deposits are not a measure of value. They are
        >simply written in the ledgers, or keyed into the
        >computers, in terms of the real measure of value --
        >the dollar.

        I.e., they "are" money in the sense that they consist of
        money, but not in the sense that the unit of account is
        "deposits" rather than "dollars."


        -- Roy Langston

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