Money- for C. B.

dlawbailey dlawbailey at netzero.net
Mon Apr 8 15:33:46 PDT 2002


Money is definitely a strange sort of contract in that in its creation it is the agreement to accept nothing for nothing - numbers in a ledger for numbers in a ledger. Of course it has a relationship to bank deposits (holders of value in exchange for value through work or selling of property) that is strictly understood in an accounting sense but is difficult to pin down in reality. Economists don't really know how much money *effectively* exists in the system, I think.

In Japan the accounting money supply is growing while the effective money supply seems to be shrinking. I was reading the great book "When Genius Failed" (a comedy for socialists) about the LTCM debacle and it seems to me that in those heady days derivative traders effectively pumped up the money supply only to have it collapse on them.



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