[GJM] #2 on Why the Work Week is getting longer in the USA

[wesburt at juno.com]

Hello again, John,

The eight year dwell (1994 - 2002) of M1 at $1,200 
Billion needs a better explanation than I offered in 
my reply of 30 Jun 2006 11:53:57 -0400 (below) to your 
inquiry of 30 Jun 2006 05:40:26 +0000.  I had been 
assuming that M1c would circulate at 26 billing periods 
per year in both of C. H. Douglas' A and B flows in the 
real economy.  I am still comfortable with the A flow to 
the households at 26 pay days (Billing periods/year) 
which makes M1c-A = $385 Billion with the 2003 GDP 
of $10,000 Billion/year.

But I would expect the B flow (business to business) 
transactions to have a much shorter billing period than 
26/year.  If it is reasonable to assume a billing period 
of 52/year for the (1.5 x GDP) B flow, the M1c-B will 
be $288 Billion as shown in Figure 4 of the revised 
visual-aid inserted below.

To raise consumer prices by 3.3% /year for eight years 
would seem to raise the circulating M1c (A+B) of $673 
Billion up to $873 Billion.  That $200 Billion increase of 
M1c in the real economy was easily supplied from the 
$527 Billion of positive balances held in corporate 
and household checking accounts; while M1 remained 
steady at $1,200 Billion for the eight years and the 
"natural inflation rate" (NRI) continued at 3.3%/year. 

 Notice in Figure 4 that the capital plant and the work 
force are in series (tandem).  Any impairement of the 
reproductive (development) process in either sector 
restricts the flow of money M1c through both sectors.  
Figure 8 illustrates several ways the reproductive 
process is impaired by reducing purchasing power in 
the lower end of the income range while increasing 
purchasing power in the upper end of the income range.

I may be too conservative in my estimates of the 
billing cycles at 26/year and 52/year.  Either way, 
it will not matter if we do not restore the economy 
to balance by adequately capitalizing the expense 
of development in both sectors to restore the NRI 
to the minus 1.2%/year of Lincoln's day.

Kind regards,

Wes Burt

~~~~~~~~~~~~ Insert Fig4 & 8h.gif ~~~~~~~~~~~~
 
~~~~~~~~~~~~ End Fig4 & 8h.gif ~~~~~~~~~~~~

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
----- Forwarded Message -----
From: wesburt at juno.com
To: johngrawson at hotmail.com
Cc: Wesburt at juno.com
Date: Fri, 30 Jun 2006 11:53:57 -0400
Subject: Re: Why the Work Week is getting longer in the USA

Hi John,

M0, notes and coins, are less than 5% of M1 which was 
$1,200 Billion in 1994 and again in 2002.  Since $962 
Billion of M1 is circulating at 26 billing periods per year, 
there must be $238 Billion of M1 held as reserves in the 
checking accounts of businesses and households, as 
shown on fig4.

To raise prices by 3.3% /year for eight years would seem 
to  raise the circulating $962 B up to $1,247 B.  That might 
be accomplished partly from the $238 B reserves and 
partly by increased efficiency of the payments system. 
So M1c would rise only part way to $1,247 B.

I don't have any better explanation.

Wes


On Fri, 30 Jun 2006 05:40:26 +0000 "John G Rawson"
<johngrawson at hotmail.com> writes:
I fail to see how demand deposits in any economy could remain absolutely
stable for a period of that duration.  Are you sure you are not confusing
M1 with M0, notes and coins in circulation?
John R.



From: wesburt at juno.com
To:
meetingplace at imagicomm.com,Discussion at globaljusticemovement.net,FixGov at ya
hoogroups.com,worldcit at googlegroups.com
Subject: Why the Work Week is getting longer in the USA
Date: Thu, 29 Jun 2006 21:51:15 -0400
~~~~~~~~~ Snip ~~~~~~~~~~~~~

                 TOP and TWP are cognoscible on
                Dr. W. Curtiss Priest's web site at:
       <http://www.epie.org/cyber-soc/default.htm>
             Where do you stand on the continuum 
        between TOP and TWP (The Wrong Policy)?
-------------- next part --------------
An HTML attachment was scrubbed...
URL: /pipermail/discussion_globaljusticemovement.net/attachments/20060706/2e1d13bb/attachment-0001.html 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: image/gif
Size: 24148 bytes
Desc: not available
Url : /pipermail/discussion_globaljusticemovement.net/attachments/20060706/2e1d13bb/attachment-0001.gif