Me: Everyone here is missing the real problem which is the idea/currently enforced paradigm of Debt Only and which has no balancing counterpart despite the rigged, cost inflationary and hence unworkable inherent nature of modern technologically advanced economies. Everyone is mentally paralyzed by the fear of monetary inflation which is a misnomer because money actually isn’t the operative factor in such, and is largely or completely unconscious of the fact that the point of retail sale is the terminal summing of all costs and so all price for any item or service and simultaneously is the terminal and only legitimate ending point for the entire economic/productive process, that is where production becomes consumption. Hence it IS the perfect place to implement the new paradigm of Monetary Gifting with a monetary policy of a discount/rebate that mirrors the digital nature of both the pricing and money systems and so benefits all agents and not only prevents any possibility of inflation (retail sale is also the terminal expression point of price inflation including large asset purchases like autos and mortgages), but integrates price deflation painlessly and beneficially into profit making systems.
Behold! All things are made new!
R: Lending does not create money.
It creates velocity, which is indistinguishable in practice from money.
It satisfies one side of the M x V = P x Q equation.
Anyone that can lend can create velocity.
So everyone can create “money”.
Me: The velocity of money creates liquidity for enterprise with which they must pay their vendors and crediters, but does not increase the purchasing power or incomes of individuals by a single cent as its classical illustration erroneously depicts. This is because any money re-circulating is business revenue NOT anyone’s individual income that can be distributed willy nilly without regard for cost accounting and the necessity for businesses to pay their bills. Macro-economists miss this because they’re off in some three times removed abstract and/or eye glazing over mathematical fugue and hence have lost track of temporal commercial realities.
RR: (Regarding home inflation) Are we still in the sweet zone Dean? Does a despotic demagogue taking us on the path to global conflict (a distinct possibility given the new SOS) figure in anywhere in the bubble analysis?
Me: Yes, all the more urgent that we implement a 50% discount at the point of retail sale (the point of retail sale for a home is the builder so a $200k home would then cost only $100k thus effectively integrating price deflation into the economy. And if we were smart enough and honest enough to confront the fact that private finance is a destabilizing, illegitimate, post retail sale and thus completely parasitical flow of additional costs we could thus make finance a public utility that could be added to retail sale you could reduce that to $50k.
Monetary Gifting is the new paradigm that will save financially dominated profit making systems from its own cost inflationary collapse.
RR: While I commend your idealism Craig I cannot help but note your ideas are impractical and therefore render your enthusiasm useless in solving real-world economic problems. Simply repeating yourself endlessly, dismissing legitimate questions of how one gets from the less than ideal to the ideal in a real world, renders you merely an intellectual parrot. In time no one takes you seriously as you are incapable of thinking outside your own minds “paradigm” long enough to render it practical within the world we find ourselves. Material wealth flows in certain channels and the ability to recognize those channels and work within the pragmatic real-world structures we find ourselves is the only way we incrementally advance towards the ideal—assuming it is a good one and worthy of our striving. Utopian solutions seldom in history have turned out well. It might serve you to consider why that is? No doubt, you will retort I do not understand, as that seems your position of last resort when challenged with the lack of pragmatic specifics of how one advances from the less than ideal to the ideal. Alas we live in a less than ideal world and no matter how much wishful thinking we engage in we must work out our ideals with and among our fellows, and that inevitably means social compromise.
Me: Utopias are not real. However, Wisdom (the integration of opposing truths) is also the best integration of the practical and the ideal. If we can over night create a Federal Reserve that backs finance when it takes leave of its moorings like it did leading up to the GFC, then with an intelligently lead mass movement of self interested constituencies we can just as easily implement a discount rebate policy and a balancing monetary authority to fund it.
There’s nothing impractical about that, and all it really takes is for one to act out the discount/rebate policy in one’s mind or with two other people until one sees how real its effects actually are. Some times lingering orthodoxies and current paradigms die only with repetitive efforts…but when the benefits finally hit you….it’s called the breakthrough AKA paradigm change.
Finally, compromise with a dominant force when a solution is actually available is not only stupid, its completely unethical. Please consider that truth.