PKT message, Re: Keynesian Christmas!-- and the collapsing international

Let me point out just one fallacy out of many in the Moslerian argument.

The government is not the monopoly supplier of "Pesos" or "Argentinos" or whatever, so therefore cannot be the "price setter."

For example, if I, your supplier, sell to you on open invoice, with the invoice denominated in "Argentinos," you and I have created "Argentinos" for the purposes of our transaction and have thereby influenced the "price level."

Of far more significance are the actions of banks and their lending practices.

>From: Warren Mosler

>To: pkt@xxxxxxxxxxxxxxxx

>Subject: Re: Keynesian Christmas!-- and the collapsiing international

>Date: Fri, 28 Dec 2001 21:10:23 -0500

>The new currency will function just fine if it is acceptable for

>payment of taxes. The govt. need not sell any securities and

>thereby leave the 'interbank' rate at 0% bid.

>As the 'monopoly' issuer of the new currency that is also required

>for tax payment the govt. is necessarily 'price setter' as is any

>single supplier, so the price level is necessarily a function of

>prices paid by the govt when it 'spends' the new currency.

>see 'a general framework for the

>analysis of currencies and other commodities'

>at www.mosler.org

>Leonardo Vera wrote:

> > Kazuhiro;

> >

> > The success of this new currency wil depend very much on its properties or

> > attributes. Does this new currency accomplish the medium of exchange and

> > store of value functions? are there well-organized, continuous spot markets

> > for those government bonds, (even against other currencies)? Is the

> > expected depretiation of that currency equal to zero? These are Davidsonian

> > questions.

> >

> > If our answers to those questions are negative, then I do not see any

> > promising future for the "Argentino".

> >

> > So, to me it is clear that there is much to be done yet

> >

> > Leonardo.

> >

> > At 04:46 p.m. 27/12/01 +0900, you wrote:

> > >According to FT, Argentina decided to introduce "third currency" called

> > the argentino. This is the denomination, except

> > >the point that its currency"will circulate alongside the peso and the US

> > dollar". I'd like to ask you how large effect

> > >the introduction of new currency has on getting the economy out of its

> > economic crisis.

> > >

> > > **************************************

> > > Kazuhiro Kurose

> > > Graduate School of Economics and Business

> > > Administration, Hokkaido University

> > > Kita 9 Nishi 7, Kita-Ku, Sapporo, Japan

> > > 060-0809

> > > TEL: +81-11-716-2111 ex:2786

> > > **************************************

> > >

> >

> > _____________________________

> > Leonardo Vera

> > Universidad Central de Venezuela

> > FACES, Escuela de Economía

> > Caracas, 1050

> > Venezuela.