Re: SV: elr and mosler/censorship

[Warren Mosler <mosler@xxxxxxxx>]

At 12:38 PM 3/8/97 +0100, you wrote:
>Mason,=20
>
>You are perfectly right about the real savings matter. Distinction between
>real and financial savings is crucial as every PK-er should recognise.
>Every PK-er also ought to recognise the important difference between
>financial assets in general and (credit) money, the latter being a subset
>of the former. Maybe the Mosler approach would gain in precision by
>bringing out this difference and clarifying its implications.=20
>
>The private sector's desired financial savings (or H(nfa) as Mosler has it,
>using somewhat home-cooked terms) is *not* the same thing as the private
>sector's desired money hoarding. The financial asset portfolio may include
>long-term debt, i.e. 30-year treasury bonds, which are even less liquid
>than many real assets. (Credit) money must denote the *liquid* part of the
>financial assets, i.e. short-term bonds, cash and check-account deposits.=
=20

No conceptual argument, but currently US 30 year tsy bonds are trading
with a 1/32 bid offer spread.  That means the difference between the price
to buy and sell $1mm is only $312.50.  =20
  >
>The private sector's financial asset desire may be satisfied by acquisition
>of long-term debt, leaving the (government borrowing part of) the money
>stock more or less unchanged.

Carefull here.  The NET financial  position of the private sector is not=
 changed
without govt 'intervention.' =20

Warren

 Apart from this, private banks can issue
>money at will by extending their balance sheets, the only restriction being
>the legal reserve requirement, which is a condition imposed by man and not
>a natural law. Some countries have abandoned reserve banking, which does
>inhibit the workings of the 'money multiplier', and ensures that the
>quantity of money is limited only by the 'supply price' of borrowing money,
>i.e the rate of interest. Vide Wicksell's "Interest and Prices" and also
>Basil Moore's brilliant "Horizontalists and Verticalists".=20
>
>Over to the real assets question: Most of these assets are, in some way,
>valued on the second-hand asset markets. For instance, I gather you are
>able to estimate (approximately) the potential sales value of your own
>home. The chief trouble is not the money value of the capital stock, but
>how to split this value in price-level and volume dimensions. Now, this is
>not a matter for grandpa at this stage. I do admire the ambition to explain
>economic matters in a language that everyone can understand. But this
>ambition must not be driven so far that it bars scientific discussion and
>progress. Some details of this god-forgotten subject is expert stuff, of
>which grandpa will have to make do with a rough understanding.=20
>
>Kindly,=20
>
>Per
>
>Per Gunnar Berglund
>Lilla S=E4llskapets v=E4g 60
>S-127 61  SK=C4RHOLMEN
>SWEDEN
>Phone/fax +46-(0)888 3065
>
>----------
>> Fr=E5n: Mason A. Clark <masonc@xxxxxxxxxxxxx>
>> Till: POST-KEYNESIAN THOUGHT   <pkt@xxxxxxxxxxxxxxxx>
>> =C4mne: Re: elr and mosler/censorship
>> Datum:  den 8 mars 1997 09:31
>>=20
>> At 04:07 PM 3/6/97 -0700, you wrote:
>> >on elr
>> >after warren's post, i finally saw what mason was getting at; it was
>> >then corrected by bill m. mason wondered if "we" were arguing that
>> >only govt can provide for net private sector saving.
>>=20
>>   Well, actually, I'm sitting under the roof of a substantial
>>   part of my "savings".  The suggestion that I'm a naughty boy
>>   for not saving enough - cause roofs don't count - bothers me.
>>   Must I collect government paper to be a "true saver"?
>>=20
>>   I understand that money is not neutral.  That said, I sense=20
>>   perhaps wrongly, that real objects - especially those not=20
>>   "on the market" are not given much recognition in economic=20
>>   theory.  An example: in Social Security worries, the huge=20
>>   pile of things and inventions we are leaving to our grandchildren.
>>   This huge pile, lacking market evaluation, seems to be ignored.
>>   This being ignored in the books makes re-educating grandpa
>>   difficult.
>>=20
>>        Mason
>>=20
>>   Can I teach grandpa about "volume measures"?
>>=20
>
>

Warren B. Mosler=20
Director of Economic Analysis
III Finance

See:=20

"Soft Currency Economics"
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
http://inca.gate.net/~mosler/softecon.html