Re: Inflation Hypothesis

["William B.Ryan" <william_b_ryan@xxxxxxx>]

1.  Michael Coburn michael.l.coburn@xxxxxxx writes:

"I've been looking at this now for a while wondering what difference
it makes.  And I confess that I don't really know what endogenous
means to an economist.  I know what it means to the rest of us but
I've been had before.  On the assumption that economists might agree
with Webster on this one I must declare my support for a more
exogenous money supply.  We must come to terms with the idea that
money is to be used to facilitate trade and that the money itself
should not be subject to trade as if it were a commodity.  IMHO it is
not proper for the facilitator of transactions (the financial
industry) to reap as much reward as that industry currently does.  An
exogenous supply of money is the proper answer.  When money is "fiat"
the only guarantor of contracts (possession based on lawful trades) is
government.  The "financial industry" merely serves as a transfer
agent. i.e. without government the money is absolutely worthless.
Since the 70's when the last thread between the US dollar and ANY
actual commodity was severed, the word interest has been an outright
lie.  Money in a fiat system is a creation of government and, as such,
money deserves no interest whatsoever in the traditional sense of that
term."
-----//

a) Endogenous means lent into circulation rather than spent into
circulation.  Bank credit is endogenous in that it is a contract. Fiat
money is exogenous in that it is a quasi commodity.

b) The money supply should be a controlled mix of endogenous and
exogenous components.

c) Fiat money spent into circulation would be interest and debt-free.
Hummel (and his Keynesian mentors) have redefined fiat to mean money
that government has borrowed.

2.  "I suppose I've been using the wrong term AGAIN, but I don't know
what the proper term would be for money that is created by government
and which is guaranteed redeemable.  That guarantee rests upon the
power of the government to lay and collect taxes and that is what
gives the currency its value.  Owners and providers must seek to
possess these dollars so as to pay taxes.   The only way they can gain
such dollars is by employing their "means of production" in the
delivery of goods and services.  The populous or any external agent
are free to use the dollars they have gained to command other owners
of the "means of production" in supplying whatever they (the current
dollar holder) may need/want.  All owners in the tax jurisdiction are
compelled by government to seek such dollars.  And therein lies the
guarantee of redemption."
-----//

Redeemable means redeemable in something else, such as gold.  Money
issued by government that is redeemable is not fiat.  What gives any
money value is its acceptability to the public.  Taxes due are debts,
but so are private debts.  Fiat money should be "legal tender for all
debts, public and private."

Bill Ryan
william_b_ryan@xxxxxxxxxxx
http://www.geocities.com/CapitolHill/Senate/7018



____________________________________________________________________
Get free email and a permanent address at http://www.netaddress.com/?N=1