From: "Tim" 
Newsgroups: uk.finance ie.general
Subject: Re: Fixed-rate Loans
Date: Sun, 25 Mar 2007 10:30:42 +0100

> "Tim" wrote:
>>What use is that definition of "money"?   :-(
>>
"Padraig Breathnach" wrote
> First, we are not dealing with a definition of money; we are dealing
> with a way of counting the amount of money in an economy.

But in order to count something, you need to know
what it is that you want to include and exclude from
the counting, i.e. you need a definition of the "thing".

"Padraig Breathnach" wrote
> I refer yo to your own area of expertise: measurements that describe
> large groups are meaningless when applied to individual cases;
> if the average age of death is 79, that does not guarantee that a
> particular individual aged 47 will be alive this time next year (or even
> that the average age of death of people aged 47 will be 79). ...

You are confusing the properties of SUMs
(totals) with the properties of AVERAGES.

True, not every number in a long list of (different) numbers
will all be the same (and hence equal to their average).

BUT the total of all those numbers will be their sum whether or not
they are all the same, or all different, or somewhere in-between.

It is a FACT that the total "money supply" is equal to
the sum of its constituent parts.  It can be broken down
into those parts relating to each 'entity' in the population.
Add all those up, and you *do* get the total "money supply".

"Padraig Breathnach" wrote
> ... Similarly, an individual's economic situation is just
> that: his situation. The economy is an aggregation ...

EXACTLY - An *aggregation* !

"Padraig Breathnach" wrote
> ... of individuals, bodies corporate, some
> non-corporate bodies, and government. ...

Let's just call all of those, "entities".

"Padraig Breathnach" wrote
> ... To apply a method of measuring the
> economy to a single small economic unit can
> produce the sort of absurdity you instance.

The same absurdity is produced when you add up all of
those absurdities for the constituent entities, to produce
the total (macro-scopic) picture of the economy.

"Padraig Breathnach" wrote
> So that definition of money supply ... is useful to
> those who make decisions about the management
> of an economy, and interesting to those who wish
> to analyse or understand economic performance.

Come on then - tell us all why it is useful to know what total
'credit balances' are!  And, of course, include why those
people want to know whether-or-not I (and everyone
else with 'undrawn credit facilities', all added together)
have made any transfers from those 'credit facilities'
to improve the 'credit balances' we have elsewhere.

Because, don't forget, if I make a transfer from my
current a/c to my savings a/c, increasing an overdraft (in
the current a/c) and at the same time increasing a credit
balance (in the savings a/c), then I am really in exactly
the same position, and the bank is in exactly the same
position, and hence so is the economy as a whole.