Re: (OPE-L) recent references on 'problem' of money commodity?

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Nov 19 2004 - 14:00:28 EST

At 10:04 AM -0500 11/19/04, Fred Moseley wrote:
>I have the same  question:  what grounds do we have for supposing that
>the price/labor-time ratio for that particular basket of commodities
>determines the MELT?

First, note that I am specifying a determinant for quantity of money
in circulation. For example, Greenspan will now drain liquidity from
the economy in order to bring the dollar price of the basket of
commodities down. So even within your own framework I have provided a
missing link--what determines the quantity of money.

Second, the point is that Greenspan attempts to assure investors,
bond holders, those who personify accumulated wealth that the dollar
will always be as good as so much of this and that commodity. The
dollar understood that way it has an indirect value. Once the dollar
is understood that way, the MELT follows.

Yours, Rakesh

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