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

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Nov 20 2004 - 09:44:33 EST

On Fri, 19 Nov 2004, Rakesh Bhandari wrote:

> 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.


Precisely how does the MELT follow?

Determined by the ratio MV / L, or otherwise?


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