Re: For your attention

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

Re. the following:

Davidson:

> > All prudent nations (except the United States) desire a surplus of
> > exports over imports to obtain a net positive financial savings position
> > on their internationally earned income.

Mosler:

> THIS ATTITUDE IS THE PROBLEM, NOT THE FINANCIAL ARCHITECTURE!

Comment:

EXCESS Domestic Credit Creation in the Reserve Currency Country is NOT a
function of the "desires" of other nations.

Mosler:

> EACH NATION ALREADY HAS THE MEANS TO SUSTAIN DOMESTIC DEMAND REGARDLESS OF
> INTERNATIONAL FINANCIAL GOINGS ON!!!

Comment:

That each nation already has the means - Credit Creation - to sustain
domestic demand is a given.

The thesis that ALL nations can do so "regardless of international financial
goings on" is, for the want of a better term, NONSENSE.

For part of DOMESTIC credit creation will translate into demand for FOREIGN
Exchange - absent (a) foreign exchange reserves; (b) access to foreign
borrowing; or (c) reserve currency status for the domestic currency in
question, the result will be commensurate domestic price inflation and
exchange rate depreciation.

Gunnar

----- Original Message -----
From: "Warren Mosler" <wmosler@xxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, December 02, 2003 11:07 PM
Subject: Re: For your attention


>
>
> >
> > All prudent nations (except the United States) desire a surplus of
> > exports over imports to obtain a net positive financial savings position
> > on their internationally earned income. This surplus is added to the
> > nation's foreign reserves. Since the global economy is on a dollar
> > standard, additions to a nation's foreign reserves are held primarily in
> > the form of US treasuries.
>
> HI PAUL!
>
> THIS ATTITUDE IS THE PROBLEM, NOT THE FINANCIAL ARCHITECTURE!
>
> EACH NATION ALREADY HAS THE MEANS TO SUSTAIN DOMESTIC DEMAND REGARDLESS OF
> INTERNATIONAL FINANCIAL GOINGS ON!!!
>
>
> BEST!
>
> WARREN
>
> =====
> Warren Mosler
> Valance Co. Inc.
> 5000 Estate Southgate
> Christiansted, USVI  00820
> 340-692-7710 office phone
> Primary email contact:  wmosler@xxxxxxxxxx
> www.mosler.org
>