[p2p-research] big does not necessarily innovate: (imaginary money)
Paul D. Fernhout
pdfernhout at kurtz-fernhout.com
Sat Nov 7 16:51:19 CET 2009
Just goes to show the power of the imagination. :-) As long as everyone
agrees the emperor is wearing clothes, it is just like he is. :-) Even when
he isn't. :-)
But sorry, you probably don't personally have the right technical equipment
to make imaginary transfers all seem legitimate. :-) And probably a good
thing as it would probably be illegal.
Mythologically, "quantitative easing" is a nice sounding term for legally
"In practical terms, the central bank purchases financial assets (mostly
short-term), including government paper and corporate bonds, from financial
institutions (such as banks) using money it has created ex nihilo (out of
nothing). This process is called open market operations. The creation of
this new money is supposed to seed the increase in the overall money supply
through deposit multiplication by encouraging lending by these institutions
and reducing the cost of borrowing, thereby stimulating the economy.
However, there is a risk that banks will still refuse to lend despite the
increase in their deposits, or that the policy will be too effective,
leading in a worst case scenario to hyperinflation."
Anyway, if banks can just magic money "ex nihilo", well, how real is it?
Ryan Lanham wrote:
> Hi Paul,
> Send me all those imaginary dollars you like. They spend fine for me.
> Money is what people take for goods and services. Nothing more, nothing
> On Sat, Nov 7, 2009 at 12:48 AM, Paul D. Fernhout <
> pdfernhout at kurtz-fernhout.com> wrote:
>> As I said in another reply, mainstream economics is confused about basic
>> words like wealth and capital because it adds imaginary things (fiat
>> dollars) and real things (houses, cement mixers, land).
>> To make progress on understanding this situation, somehow we have to
>> disentangle theses issues of control system (like by fiat dollar ration
>> units) and physical reality.
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