The present economic system appears to respond more to psychology than common sense. Purchasing of goods and services drives the mechanism that generates them and if the people as a whole believe that the future will be bleak then they shut down the money flow and consequently the production. I think FDR had it right when he said that the only thing we need fear is fear itself.
Too much money being minted is going to cause inflation and the the question is only when and not if as far as I have observed. Take a look at what happened just after WWI when Germany printed a zillion marks which resulted in each being virtually worthless. There is an argument that massive government spending is a good thing that can offset the lack of spending by the population, which is being tested currently. This concerns me since I fear the oncoming inflation. It is highly unlikely that the spending by big government will be reduced and a reduction in money supply compensated if and when the citizens decide it is time to begin spending in earnest. If you do not believe that inflation is coming as a result of the money supply gone wild then compare the value of the currency to something firm such as gold. Do not be surprised to see the price of gold soar in the future as it has in the recent past. You suggest that extra production generated in response to increased money supply will offset the increase and keep inflation in check. This might be true to an extent, but follow the historical price of gold if you want to see how true it remains for a long time period. Obviously, the extra money has not been well balanced over time. Dave -----Original Message----- From: Randy wuller <[email protected]> To: vortex-l <[email protected]> Sent: Mon, Oct 21, 2013 3:04 pm Subject: Re: [Vo]:Switzerland considers giving every citizen $2,800 a month Craig: Money is not Wealth! Exactly. But the goods and services produced depends in large part on the amount and allocation of money in society. In our current society money not only allocates goods and services it also effects the level of production of those goods and services. You assume in your example that the printing of $100 circulated in society simply chases the same # of goods and services. That isn't even close to true. If on the other hand the printing of $100 simply doubled the goods and services produced there would be no change at all in the value of goods currently held, no inflation no doubling in cost just twice as much to allocate. This is much closer to the current reality. As long as this notion exists that we are allocating scarce limited wealth (resources), we can never embrace the true reality of unlimited resources. ----- Original Message ----- From: "Craig" <[email protected]> To: <[email protected]> Sent: Monday, October 21, 2013 12:18 PM Subject: Re: [Vo]:Switzerland considers giving every citizen $2,800 a month > On 10/21/2013 12:51 PM, H Veeder wrote: >> >> Instead of being a cash transfer, basic income would work like a >> decentralized mint, where individuals would be ascribed the power of >> limited legal tender creation. >> >> harry >> > > Printing money is no different than if every person had a tax placed on > all of his available cash. Let say, for example, that there is $100 > total in circulation in society. Then if I print another $100 and start > spreading it around to people to use; then everyone who does not receive > a portion of the new $100 that I printed will find that the money they > have will not buy as much, because the new $100 will be spent into > society and will bid up the prices. > > Money is not wealth. Wealth is the goods and products that people > create; and the services they provide. > > Craig > >
