On Sep 28, 2008, at 10:03 PM, Jim Devine wrote:
me:
When that power goes away, as during a civil conflict or after
losing a war,
the printing presses roll and fiat money loses its scarcity value,
so that
hyperinflation roars.
Sabri Oncu wrote:
In a way, this is what happened over the past decade. Not necessarily
hyperinflation but a very high inflation in asset prices. Now, the
asset prices are deflating as the money is being destroyed.
I was using the word "inflation" in its standard way, to refer to the
sustained increase in the prices of newly-produced goods and services.
Asset price inflation is something different. Even if we conflate the
two types of inflation, the rise in prices in the recent housing/asset
bubble was hot "hyper."
Now asset prices are "deflating." Is that because of a declining money
supply? is there a Monetarist in the house?
Marx wrote that in the quantity theory identity, mv=pq, it is the
quantity of transactions pq that is the determining factor, and that
the money supply is dependent (that is, v is roughly constant--Keynes
would demur). In the present conjuncture it would be the deflating of
asset prices in the house market that is decreasing the money supply
but also the velocity of circulation (as bankers refuse to lend, even--
or especially--to each other, and potential debtors are unable to find
new loans). In this as in any other serious slump.
Shane Mage
"Thunderbolt steers all things...it consents and does not consent to
be called Zeus."
Herakleitos of Ephesos
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l
