correction/ Re: BOJ poised to use free money

["Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>]

Sorry, the second paragraph should read:

Interest nudges the debtor to produce sooner rather than later.
When the CB rate is too high, production lags consumption.
Similarly when the CB rate is too low, production gets ahead
of consumption.

Harry Veeder


----------
From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: BOJ poised to use free money
Date: Wed, Mar 21, 2001, 5:08 pm



The problem is not the interest. The problem is who is
or is not spending the interest.

Interest nudges the debter to produce soon rather than later
When the CB rate is too low production lags consumption.
Similarly when the CB rate is too high production gets ahead
of consumption.

However, for the system to be harmonized the consumer must be
spending some of the interest ( not identical to a dividend) otherwise
the economy becomes discordant regardless of interest rates.

Harry Veeder