Re: What is Creditary Economics?

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Furthermore, even at a micro level, Warren havs not done well.
The apparent benefit, if any, to Warren is not derived from the
principle of money as a storer of value, but from his shrew trading move
in preferring one asset to another by taking advantage of the temporary
negative cost of his liqidity preference.  If Warren sold his house in
Florida and converted the proceed to yen which then droped from 60 to a
dollar to 120 to the dollar in a decade, and then tries to buy a house
in Folrida a decade later, he would be quite unhappy. Even if he were to
buy a house in Tokyo, he has not really beneifted if he continues to
spend dollars on his racing cars, or tries to sell his house to return
to Florida.  Deflation is not a sign of money acting as a rising storer
of value, although it might appear to have that effect.  The benefit can
only matereialize through exchange of assets, not byholding on to meny
per se.  Deflation is merely a pnhenominon in which the cost of
liquidity prefernce is negative.  Money continues to act as a medium of
exchange.  It is the exchnage that cuases you profit or loss.

Henry C.K. Liu

John Vertegaal wrote:
>  Warren Mosler wrote:
>
>
> > 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.
>
>
> Creditary Economics is about the macro condition.  Your example, though
> true for the individual, is irrelevant; as it is powerless to consider
> whether economic values were lost elsewhere, because of such 'saving'
> activity.
>
> Same goes for your advice to Paul D. to take some 'equity' out of his
> home.  Equity is a significant term on the micro scale; but it is bogus
> macroeconomically, as equity release only affects the value of the unit
> of account.
> But since you know that every $ in one's hand is a borrowed one and that
> lenders set a time frame for repayment, you are already perfectly aware
> that systemic advantages for the few, are offset by disadvantages for the
> rest.
>
> John V