From: John Boyle 
Newsgroups: uk.finance
Subject: Re: D Tel: Travellers with over ? must tell taxman
Date: Mon, 2 Jul 2007 23:43:09 +0100
Bytes: 3139

In message , Ronald 
Raygun  writes
>> Yes. That's the problem.
>
>It's not a problem, it's desirable.  For stability it is good for
>money to be in short supply.

No its the exact opposite. Shortage of money = deflation.
>
>>>If you need more money and there isn't more gold, then gold simply
>>>becomes more valuable.
>>
>> eh?
>
>If money just represents gold, then if there are more goods to be
>bought with a fixed amount of the gold which money represents, then
>the gold (and the money tied to it) becomes more valuable in terms
>of the goods which can be bought with it.

Yes, so prices fall.
>
>>>  Is that a problem?
>>
>> er, yes. Can you explain how we would get by otherwise?
>
>What's the problem?  Well, apart from the well-off hoarding it?

There would be no goods or food. Because nobody could afford to sell at 
a loss.
>>>Why is it a good thing?
>>>
>> Because it is a natural outcome of a vigorous and growing economy.
>
>We don't want one of those.  Stability is much better than growth.

Remarkable. You must have been smoking some Scottish weed. Stability in 
the sense I think you mean requires some degree of inflation. Zero 
inflation is likely to slip into deflation, and isnt a scenario either 
of us would want.



>As for vigour, modesty demands it be kept private.
>

-- 
John Boyle