[PLUG-TALK] What is money? (was Fair Use, etc.)

J.A. Henshaw jeff at jhenshaw.com
Fri Mar 29 20:58:45 UTC 2002


Russell Senior wrote:

>>>>>>"J" == J A Henshaw <jhenshaw at dsl-only.net> writes:
>>>>>>
> 
> J> Well, let's examine that angle..  Many mortgages have a clause
> J> wherein it can be called if the loan goes upside down.
> 
> You are, once again, confused. 



Nonetheless many loans have that clause.  You better hope 
that they choose inflation this week while you have a 
mortgage rahter than recession,  because even though I 
addressed the latter scenario,  the facts remain,  Mr. Senior.


Yes, I read it backwards. My mistake.


When was the first time I was confused?


Because I know the difference between credit and money,  and 
you apparently do not,  I am confused??

It IS artificial when the lending rates and volume of loans 
is controlled by 12 banks which are not controlled by the 
people or their representatives,  Mr. Senior.


You seem to think that the cycles of recession and 
depression, inflation and deflation are not connected to the 
amount of money and credit in circulation.



 A loan goes upside-down when you owe
> more on the mortgage than the property is worth.  This is exactly the
> opposite situation.  I've promised to pay back a finite, unadjustable
> amount of currency on a set schedule.  If the house becomes worth
> _more_ in that currency, then that is _my_ money, not the banks.  Even
> adjustable-rate mortgages have caps on the amount that the interest
> can increase (something like 6% in most cases), say from 7% to a
> maximum of %13 percent.  If inflation suddenly starts running 100% a
> month, you are in _fat_ city.
> 
> J> If runaway inflation artificially raised the sale price of your
> J> home, and they called your note; could you pay it off at the newly
> J> inflated price?
> 
> Runaway inflation wouldn't "artificially" raise the sale price of my
> home.  There would be nothing "artificial" about it.  It would have a
> "new" value in that moment's housing market.
> 
> 
> 


The value is in credits,  not in money.  The trees and 
plaster,  roofing and concrete are changing in value due to 
artificial pressures on the money ( credit ) supply.

In absence of this artificial pressure,  the value would be 
stable.

Your children could buy a home at the same price you did, 
with money they kept under their mattress.


Am I confusing you?  Don't feel too bad,  not many people 
understand it.




-- 
Democracy is when two wolves and a sheep vote on what they 
will have for lunch.





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