Hi Bill, I know I have been quite busy this last week or so and would like a refresher as to when I remarked re "assets as the residual of bank- financed expenditure. Vic B
> Victor, you questioned some remarks I made regarding > assets as the residual of bank-financed expenditure. > > Think of it this way: Say you purchase a house > through a mortgage, which you pay-off over time. > What remains is "equity." If you were a business > rather than a homeowner the story does not end there. > That "equity" is expensed against continuing > production as it depreciates which transfers costs to > consumers without a corresponding disbursement of > purchasing power. > > Think of the firms sector as being divided into two > departments: the department manufacturing labor > saving machines which they sell to the other firms, > and the department of the other firms purchasing the > labor saving machines. > > With labor displacement, the firms purchasing the > machines *prospectively* increase their profit by > displacing labor, and the firms selling the machines > *realize* profit as they sell the machines. > > The realized profit is an offset to bank debt--which > translates into increasing equity that does not exist > in the form of money that is unencumbered in either > the firms sector or in the hands of consumers. > > It is a dilemma that cannot be resolved without the > establishment of something like a national > "macroeconomic" capital account, from which dividends > may be paid--bringing the flow of purchasing power > into equivalence to the flow of costs. > > _________________________________________________________________ > Tired of spam? Get advanced junk mail protection with MSN 8. > http://join.msn.com/?page=features/junkmail > > > > > ==^================================================================ This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^================================================================
