(OPE-L) Re: Realisation an seigneurage

From: gerald_a_levy (gerald_a_levy@MSN.COM)
Date: Wed Apr 30 2003 - 08:00:21 EDT

Re Paul C's (2nd) post on Tuesday, April 29:

> This is not adequate Jerry.
> The point I am making relates to the general phenomenon of
> inflation, where state bank notes continue to function as money
> but depreciate. I am not concerned with the rare situations in
> which the currency becomes completely worthless - but the more
> mundane phenomenon of monetary inflation.
> A dollar is still accepted as a medium of exchange in the US
> but it is worth significantly less than it was 30 years ago say.

I didn't intend my reply to be an answer to all of the issues you
raised previously -- only to the more limited question of "what
validates the money issued by the state bank and or the credit
system."   I agree that it is not an adequate explanation for inflation
or, for that matter, deflation.

To explain inflation in the last 30 years (and the more recent wave
of deflation experienced in many capitalist nations) we have to
consider (among other issues) state macroeconomic policies including
deficit spending,  aggregate demand and the trade cycle,  and
international trade and currency exchange rates --  since inflation and
deflation can not be comprehended only in terms of developments
within an individual nation.   But, I  understand the spirit of your
question to be that you want to address the 'simple case' first.  Yet, if
that is the case and you wish to discuss the relation between the
quantity of value and the quantity of money, why not first discuss the
even simpler case where there is a money commodity?

In solidarity, Jerry

PS: when are you leaving for the Havana conference?

This archive was generated by hypermail 2.1.5 : Fri May 02 2003 - 00:00:01 EDT