Loading ...
Sorry, an error occurred while loading the content.

RE: [LandCafe] Re: Reduced Borrowing Under LVT

Expand Messages
  • David Reed
    A rare sighting of the concept of the velocity of money, which the Brit post-war Radcliffe Commission declared as important as the quantity. To:
    Message 1 of 16 , Nov 1, 2008
    • 0 Attachment
      A rare sighting of the concept of the velocity of money, which the Brit post-war

      Radcliffe Commission declared as important as the quantity.
      To: LandCafe@yahoogroups.com
      From: calhorn@...
      Date: Fri, 31 Oct 2008 17:45:59 +0000
      Subject: [LandCafe] Re: Reduced Borrowing Under LVT

      --- In LandCafe@yahoogroup s.com, "Dan Sullivan" <pimann@...> wrote:
      >
      > On 31 Oct 2008 at 17:10, Walter Horn wrote:
      >
      > > My question is--if we fix the land problem and concur that most
      of
      > > the money is created by debt--why is that a problem?
      >
      > Because the debt still has to be paid. If we don't address the
      money
      > problem, paying the debt becomes impossible.

      I guess I don't understand that point.

      >
      > > Roy has said that there won't be sufficient lending, but you
      > > seem to be pointing to another concern.
      >
      > I don't know that "sufficient" was Roy's term. Sufficient for what?

      I think he was talking about sufficiency for economic expansion. But
      I'll let him speak for himself.

      > I was agreeing with Roy that borrowing would be reduced, and was
      > pointing out that this would cause money to come out of
      circulation,
      > making it impossible to pay taxes. That is, solving the land
      problem
      > does not solve the money problem. Rather, it brings the money
      > problem to a head.
      >
      > -ds
      >

      Again, I don't think I understand "the money problem." I can see
      that debts have to be repaid, that banks create currency when they
      make loans, that fractional reserving rules have huge effects on the
      amount of currency that can be created out of thin air, so that it
      may make sense for those rules to be changed if there's too much
      inflation, or insufficient velocity for expansion. But I take it
      none of these (except maybe the first--that debts have to be repaid)
      is "the money problem."

      W




      For the best free wallpapers from MSN Click here!
    • Dan Sullivan
      (Any unattributed statements are my opinions.) ... Yes. Price inflation is often described as too much money chasing too few goods. To the extent that this
      Message 2 of 16 , Nov 1, 2008
      • 0 Attachment
        (Any unattributed statements are my opinions.)

        On 1 Nov 2008 at 9:47, David Reed wrote:

        > A rare sighting of the concept of the velocity of money,
        > which the Brit post-war Radcliffe Commission declared as
        > important as the quantity.

        Yes. Price inflation is often described as "too much money chasing
        too few goods." To the extent that this is valid (and I think it is), then
        money stuffed in a mattress or sealed in a vault is not contributing to
        inflation until it is taken out and used. Only money that is being
        exchanged contributes to inflation.

        Depositing money in a bank only contributes to inflation indirectly,
        for it is in the loaning of money that the money goes into circulation.
        People who borrow money spend it very quickly, as it is costly to pay
        interest on money that one is merely holding.

        If we view bank credits as something other than money, then under a
        compounded 3% fractional reserve, the same money is available to be
        spent over 9000 times at once.

        What this means is that inflation is not merely determined by the
        amount of money in existence, but the amount of money in
        *circulation*. This is why I am skeptical of formulas tying the money
        supply to population, to land values, or to anything other than a good
        general price index. It's hard to reduce human behavior to formulas.

        -ds
      • Fred Foldvary
        ... So you don t believe the law of demand? (The formula that people buy more stuff when the price is lower.) Fred
        Message 3 of 16 , Nov 1, 2008
        • 0 Attachment
          -- Dan Sullivan wrote:
          > It's hard to reduce human behavior to formulas.

          So you don't believe the law of demand?
          (The formula that people buy more stuff when the price is lower.)
          Fred
        • Dan Sullivan
          ... So you don t know the difference between a law and a formula? ... That s not a formula; it s just a statement of tendency. A formula would be that lowering
          Message 4 of 16 , Nov 1, 2008
          • 0 Attachment
            On 1 Nov 2008 at 8:01, Fred Foldvary wrote:

            > -- Dan Sullivan wrote:

            > > It's hard to reduce human behavior to formulas.
            >
            > So you don't believe the law of demand?

            So you don't know the difference between a law and a formula?

            > (The formula that people buy more stuff when the price is lower.)

            That's not a formula; it's just a statement of tendency. A formula
            would be that lowering the price by X would increase demand by Y,
            with various constants and mathematical relationships in between.
            Such formulas are often used to predict, and they are perhaps more
            accurate than Ouija boards.

            Oh, yeah.... In my opinion.

            -ds
          • Fred Foldvary
            ... would be that lowering the price by X would increase demand by Y, with various constants and mathematical relationships in between.
            Message 5 of 16 , Nov 1, 2008
            • 0 Attachment
              --- On Sat, 11/1/08, Dan Sullivan <pimann@...> wrote:
              > A formula
              would be that lowering the price by X would increase demand by Y,
              with various constants and mathematical relationships in between. <

              That's a different definition than those in dictionaries:

              # a group of symbols that make a mathematical statement

              For example, the formula for the area of a rectangle is the base times the height. Note that this formula is general and does not have constants or specific numbers.

              # a conventionalized statement expressing some fundamental principle
              # a representation of a substance using symbols for its constituent elements
              # rule: (mathematics) a standard procedure for solving a class of mathematical problems
              # In mathematics and in the sciences, a formula (plural: formulae, formulæ or formulas) is a concise way of expressing information symbolically (as in a mathematical or chemical formula), or a general relationship between quantities. ...
              Formulae are symbolic, not necessarily specific (e.g. with constants).

              One can express the law of demand as the symbolic equation:

              Q = f(P), dQ/dP not positive
              where Q is quantity and P is price.

              This agrees with the definitions above.

              Fred Foldvary
            • Dan Sullivan
              ... You ve lost the context, Fred. There are many definitions of formulas, and you picked one that can t possibly apply. Had you not deleted the context of my
              Message 6 of 16 , Nov 2, 2008
              • 0 Attachment
                On 1 Nov 2008 at 20:16, Fred Foldvary wrote:

                > --- On Sat, 11/1/08, Dan Sullivan <pimann@...> wrote:
                > > A formula
                > would be that lowering the price by X would increase demand by Y,
                > with various constants and mathematical relationships in between. <
                >
                > That's a different definition than those in dictionaries:

                You've lost the context, Fred. There are many definitions of formulas,
                and you picked one that can't possibly apply. Had you not deleted the
                context of my statement when you replied, this would be obvious.

                Here it is again:

                "This is why I am skeptical of formulas tying the money supply to
                population, to land values, or to anything other than a good general
                price index. It's hard to reduce human behavior to formulas."

                Clearly, I am speaking of one of the other definitions of formula, and
                one of the more common definitions at that.

                Here are such definitions from dictionary.com

                Definition 1: a set form of words, as for stating or declaring
                something definitely or authoritatively, for indicating procedure to be
                followed.

                Definition 2: any fixed or conventional method for doing something.

                Definition 5: a recipe or prescription

                All these are general use definitions of formulas, and are the
                definitions I was using. The definition you posited was similar to a
                definition posited as peculiar to mathematics. As I was speaking of
                monetary policy rather than mathematics, it should be clear that I was
                using the term "formula" as defined above.

                -ds

                >
                > # a group of symbols that make a mathematical statement
                >
                > For example, the formula for the area of a rectangle is the base times the height. Note that this formula is general and does not have constants or specific numbers.
                >
                > # a conventionalized statement expressing some fundamental principle
                > # a representation of a substance using symbols for its constituent elements
                > # rule: (mathematics) a standard procedure for solving a class of mathematical problems
                > # In mathematics and in the sciences, a formula (plural: formulae, formulæ or formulas) is a concise way of expressing information symbolically (as in a mathematical or chemical formula), or a general relationship between quantities. ...
                > Formulae are symbolic, not necessarily specific (e.g. with constants).
                >
                > One can express the law of demand as the symbolic equation:
                >
                > Q = f(P), dQ/dP not positive
                > where Q is quantity and P is price.
                >
                > This agrees with the definitions above.
              Your message has been successfully submitted and would be delivered to recipients shortly.