Capitalism : the way of creating wealth OUT OF THIN AIR There are two ways of cheapening money: mechanically, by printing it, and emoltionally, by making it more easily available (less desirable) by lowering the interest rates.
There is also a way of enriching money, and that is by NOT doing either of the above, by not interfering with the market. Here is why. If somebody came along and told you that you can make gasoline out of water, you'd call him a con man. Can't be done. But I am here to tell you that you can create money out of thin air. The govt creates it by printing it, which is bad, for it cheapens money and thus creates no real wealth. This is the mechanical creation of wealth. But wealth can also be achieved by simply believing that it can be done (by naturally rising prices in hopes of future gain). Profit, the magic ingredient of capitalism, is the creation of wealth OUT OF THIN AIR, where nobody loses, if they both choose wisely enough. Both parties can profit-- the seller by receiving a higher price and the buyer by paying a higher price in the hope that he can resell it at an even higher price or make use of it in some other profitable way, such as buying in bulk. So the hope of the seller-- for a brighter day tomorrow-- is what creates wealth in the economy. Before the bubble burst, the housing market was an example of this, except that there was a third party-- the govt-- who made cheap money available by lowering the interest rate. That screwed things up by luring the buyer into thinking that the housing price would rise, but it didn't. That's not a free market, and that's why the bubble burst, because it was an unrealistic hope. Dr. Roger B Clough NIST (ret.) [1/1/2000] See my Leibniz site at http://independent.academia.edu/RogerClough -- You received this message because you are subscribed to the Google Groups "Everything List" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/everything-list. For more options, visit https://groups.google.com/groups/opt_out.
