Money Creation (was Re: Land and Depression)
- 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.
- Harry Pollard wrote:
>Your transaction at the ATM was simply an electronicExactly. A piece of paper (check) would merely have
>version of something written on paper, with your pin
>number taking the place of a signature.
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 yourNo, 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 bankBut as you know, I _did_ use the bank deposit to pay
>deposit to purchase anything -- something you can do
>with the dollar bills, which are money.
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:Of course not. Buying something at Wal-Mart with a bank
>>>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.
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 cardsNever seen a debit card used to buy anything?
>used, I have seen cash passed across the counter, I have
>never seen a bank deposit trundled up to the cash register.
>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
>They are, however, denominated (as you put it) in the<sigh> A 50-foot tape measure is just as "real" a
>real measure of value -- the dollar.
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.
>Perhaps you are confused by the artificial separationsNo. I am just willing to know some facts which you
>of "monies" used by economists for specific statistical
seem to have decided not to know.
>You must remember that economists do not really discussThe Ms are just terms for different sorts of money, same
>money, rather they talk about "M's" - their contrived
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 doNot every proposition of which is false, nor definition
>as they wish. It doesn't make it right - or sensible.
>It is done for the purposes of their arcane science.
>Bank deposits are not a measure of value. They areI.e., they "are" money in the sense that they consist of
>simply written in the ledgers, or keyed into the
>computers, in terms of the real measure of value --
money, but not in the sense that the unit of account is
"deposits" rather than "dollars."
-- Roy Langston
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