Tom Walker: There is a difference between a transaction, which established a current price, and value which reflects the likely future price of the inventory based on the latest transaction price. Say's law applies more to transactions. While for every buyer, there must be a selling and vice versa, the gain and loss of the transaction in price terms affect the value of the entire system in economic terms. Also there are occasions where there is a price but no transactions because systemic resistance to price adjustments contradicts with transactional prerequisites. Or, there are times that potential particiapnt in the market agree the price is right, yet no transaction take place for other reasons, such as liquidity shortage. Further, some transactional losses are not transferable into counter party gains. Such losses just evaporate from the system as in a burst bubble. Henry C.K. Liu Tom Walker wrote: > Barkley Rosser wrote, > > > Of course he could be wrong and this is January, when > >the "January Effect" of unusually rapidly rising stock > >prices frequently happens. But then October is often a > >time of unusual declines and this last one saw a record > >runup. Oh well, we shall just have to wait and see. > > As I understand Say's law, for every seller, there's a buyer, eh?. > Obviously, then there's as much money to be made during a stock market > decline as during a rise. Or as Malthus said, "What an accumulation of > commodities! Quels debouches! What a prodigious market would this event > occasion!" (quoted by Keynes on page 364 of the General Theory of Employment) > > Tom Walker > http://www.vcn.bc.ca/timework/
