Re: Value and Currency/Re: two currencies and Korean war

["Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>]

Barkley,

>Harry,
>     Nice story.  But if the bucket leaks
>too much people will use something else.

There is nothing else to use. The bucket is the same bucket
for all monies in a given economy. In other words
my bucket model functions as a economic archetype. This means
anything functioning as money within a given
economy will assume the qualities of the archetype.
The archetypal bucket either leaks or does not leaks.
If it leaks this results in hyperinflation.
I am not sure about the causes of ordinary
but I don't  I believe it involves a
leaky bucket.


>It is well known that as the inflation rate
>rises first longer term capital markets
>disappear and eventually even the medium
>of exchange function breaks down, with
>people either using barter or another
>currency in hyperinflations.

If there was something else to use (i.e. if they
could somehow avoid the archetype) then shouldn't
hyperinflation end?


>  In such
>cases, paying taxes in the official currency
>may be the only function left for which it is
>used, which rather raises a few questions
>about the stricter versions of chartalism.
>Barkley Rosser
>----- Original Message -----
>From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
>To: <pkt@xxxxxxxxxxxxxxxx>
>Sent: Wednesday, January 09, 2002 10:18 AM
>Subject: Value and Currency/Re: two currencies and Korean war
>
>
>>
>> >On Fri, 4 Jan 2002, William F Hummel wrote:
>> >> But legal tender FOR PAYMENT OF TAXES is
>> >> precisely what chartalism is all about.
>>
>> On Tue, Jan 8, 2002,
>> Alan G. Isaac wrote:
>> >Legal tender laws are more than that, as you are well aware.  But
>> >legal tender laws are *also* just one institutional means to support the
>> >expectation that currency will retain value.
>>
>> I don't think the ability of a currency to _retain_ value is a necessary
>> feature of a currency. What is essential is that currency be considered
>> the preferred means for _collecting_ value. Currency must first function
>> as device for the _collection_ of value before it can function as
>> device for the _retention_ of value.
>>
>> I'll explain what this means by an analogy. If people want to collect
>> water  (a sort of 'value'), a bucket is a good thing to have even
>> while the bucket does not happen to contain water.
>> Similarly, if people want to collect value, through taxation
>> the currency becomes the preferred device (the preferred 'bucket')
>> for the collection of value even if the currency should begin
>> to lose value like a leaky bucket.
>>
>> Harry Veeder
>>
>