Re: What is Creditary Economics?

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

--- "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:
> Warren Mosler wrote:
> > --- "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:
> >
> >>I agree.
> >>So much for the storer of vaule view of money.
> >>You can try to use money as a storer of value, but
> >>it will fail you.
> >
> >
> > Not recently!  And yen prices have been going down
>
> > for quite some time.
>
> The concept of "Recently" negates the concept of
> strorer of value.

ok.

> "Recently" is applicable only as a trading startegy.
> Even with the yen, if you held yen for the last 10
> years, you can buy
> more yen assets at the end of that period as measure
> by price, but the
> the real value, i.e. productivity value, or earning
> value of that asset
> will not represent a benefit to you unless your are
> a trader, in which
> case money as a storer of value has no meaning to
> you. Deflation allow
> money to buy more, but not necessarily more value.
> the relationship of
> money and value is not time constant.

ok. But if I had saved my yen and rented in Japan
rather than bot a house I'd be way better off today.
The yen more than stored value for the (potential)
home buyer.

And if I can buy a company cheaper today than 10 years
ago I was certainly better off waiting.
And today's market prices should be 'fair value'
for the most part, as they were back then?

> >
> > The 'value' of a unit of a currency is a function
> > of what the govt of issue makes you do, at the
> margin,
> > to get it.  Operationally, that govt can make it
> > easier to get (govt simply pays more for the same
> > services/goods, etc.) or harder to get (govt pays
> > less, etc.) just like any other monopolist/single
> > supplier.  Yes, politically paying more seems to
> be
> > the fashion over time, but that's another story.
>
> The government acts as a fundamentatal anchor of the
> value of money.
> But in modern financial architecture, the government
> is far from being a
> single supplier of money or sole monopoly in the
> creation of money.

You are using the term 'money' too losely here to
keep track of the underlying dynamic.  It's as if in a
discussion of a commodity you were using the 'longs'
of the future and forward contracts interchangeably
with the stuff mined, farmed, etc. that gets consumed
or goes into the warehouses.

  If
> money is created whenever credit is issued, then all
> creditors can
> create money (though not necessarily legal tender,
> which as you like to
> say, is another story), Many creditors do not
> process governmental
> powers. Government does have more power than others
> to determine,
> affect, manipulate, maintain or enforce the value of
> its money, and
> sommetimes even the money of other governments, but
> it cannot do so
> without incurring a cost.  The workings of that cost
> is the essence of
> monetary economics.

Another different story!  Govt, or it's designated
agents, IS the sole supplier of the thing it demands
for payment of taxes, and therefore is 'price setter,'
whether it knows it or not, whether it acts like it is
or not.

Best,
Warren

=====
Warren Mosler, www.mosler.org
c/o James River Capital Corp
5007 Chandler's Wharf, Suite 201/202
Christiansted, USVI  00820
340-719-8813 office phone
340-719-8804 Fax
Primary email contact:  mosler@xxxxxxxxxxxxxx

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