[GJM] Another Response on Inflation Controls.

[robert searle]

Dear All,

         Zack Johnson is at it again! Anyway, I will
attempt the "impossible" by trying to satisfy his
questioning though his mind seems to be clearly set in
"old paradigm" economics to use Rodneys expression.


1) It appears that his first query is how the
inflation control system relates to Government.
Ofcourse, this has been explained before...but never
mind we shall do it once again!

The answer is this. The inflation control system
should be separate from the Government if desired. In
other words, a private commercial company. Indeed, it
would probably be part of the banking system. It too
like the FED is a business per se though it may give a
false impression of being some kind of governmental
organization. 

Who though conducts inflation control policy....the
private sector, or the government? It can be former,
or a bit of both...It does not matter too much. What
matters if whether the use of direct super-flexible
controls allow things to run "well".

It should be noted that in the UK, and many other
countries the tax authorities have powers to check
private bank accounts. Similiarly, the inflation
control agency connected with a democratic government
could do likewise if absolutely necessary. 

ii) With respect, I have tried to explain in simple
English how an effective though admitedly unpopular
approach (rather like taxation) would probably be
vital in the initial introduction of a tax, and
interest free economy. It would probably involve the
electronic lowering of the Price Ceiling so that any
rapid price rises would be capped automatically. This
process may be repeated several times if necessary....

Thus, in spite of any inflationary pressures
businesses would have no choice but to lower their
prices to certain levels or risk  being fined out of
existence in a very short period of time!! Yes, a
"draconian" measure if you will....like the
non-payment of income taxation, and the possibility of
the jailhouse!

However, there would be special back-up with any
businesses that get into trouble with the above. Yet,
basically hyperinflation, and devaluation of currecny
is essentially "impossible"...............

Moreover, it does not matter how much new
non-repayable money is transmitted as it is indexed
linked electronically to inflation levels. Thus, it
cannot be devalued, and ultimately cannot be spent if
the resources are not there . Thus, there a huge
number of dormant accounts would come about...

Again, I must stress that I have repeated all this
before, and I hope I do not need to do it
again..............


R.Searle





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