[GJM] PRICE RISES, AND SUBSIDIZED PRICE DECREASES IN TRANSFINANCIAL ECONOMICS. THE KEY TO ELECTRONIC INFLATION CONTROL ( MAY 2008)

[robert searle]

Dear All,

       Here I enlarge on the concept of price
increases, and subsequent subsidized price decreases
in Transfinancial Economics. This holds the key as far
as I can see at present of preventing wholescale
(controlled) hyperinflation.

It is not my intention here to describe again
automatic inflation adjustment, automatic inflation
deduction, et al. Rather I will get to the rub of it.

As new non-repayable money is responsibly transmitted
into the economy prices in certain sectors of the
economy will begin to rise. As to "when" this occurs
is a difficult matter to predict with accuracy though
economists would love to have a try. Anyway, whatever
the time lag it is important to understand that when
the possibility of (controlled) hyperinflation becomes
more, and more certain the inflation department of the
banks would get the green light to introduce
"temporary" price descrease subsidization.

How does this work? Well, the bank computers would
ofcourse have electronic records of the price rises
whenever a product, or service has been sold. The
companies involved would receive via computer, or by
snail mail a communication describing the  programme
of price decrease subsidization which would be
mandatory. This ofcourse would come from the inflation
deparment of the bank.

Essentially, it would mean this. A temporary
electronic Price Ceiling would be set. If the prices
continue to climb they would be automatically, and
heavily fined. 

However, if prices fall, or decrease then they would
receive an automatic financial incentive, or subsidy
created by the transmission of non-repayable money.
This subsidy would possibly be increased until a more
sensible pricing level is attained. Then, there could
possibly be a return to the a "Free" Price System.
Thus, there are large, or "small" price rise  "cycles"
followed by periods of subsidized price descreases. 

It should become obvious to anyone that business would
not put their prices up for obvious reasons because of
the temporary electronic Price Ceiling as they would
be progressively fined to zero. If any problem results
(unlikely infact by the way the system would be set up
as the subsidization process would be comprehensive,
and would ofcourse include relevant suppliers)they
could apply for special grants, and/or interest free
loans all of which would be transmitted by the
inflation department of the bank. However, if
fraudulent claims are made they would be heavily
fined....directly.

Ofcourse, some critics might point out that this could
lead to some distortion in pricing, and competition.
This is true to a point but it must be remembered that
businesses at the end of the day are there to make
money, and would make more of it inspite of the
subsidized price decreases already described in brief.


For businesses the basic advantages of all this is 

a) Taxation would be superflous as inflation levels
would be controlled.

b) Interest Free loans.

c) There is NO cyclical "boom", or "bust" periods as
prosperity becomes a continous process.

d) The possibility of non-repayable commerical grants.


http://www.p2pfoundation.net/Transfinancial_Economics


R.Searle.

A Note. It is important to say that we are not talking
about a general subsidy but one based on the retail
price of the product, or service. Thus, the subsidies
would vary, and make it easier for companies to
continue business as usual.






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