12/24/2023 0 Comments Cm labs sixtyfour![]() Like electrons and positrons, these two kinds of money are created from nothing, and, when they meet again, they disappear. ![]() When a loan is established, two kinds of money are created that might be called positive and negative money, also called assets and liabilities. Historic Background - It is well known that the money supply expands as chartered banks make loans, and contracts as those loans are paid off. But, to a banker, the “money view” is what it is all about. Of course, such a monetary system only has real meaning to most of us when it is linked to a biophysical economy, in which the prices of hammers are important. CmLab is primarily a capital exchange model. The trick is to determine how much money SHOULD be so created. Also, there need not be a lack of money as it can be “creatio ex nihilo”. Money does not degrade and need replenishment the way energy does, so it does not flow from source to sink. Since money is conserved, this makes it very similar to a biophysical model through which energy flows, but there are some obvious differences. The only thing that matters in such a model is the flow of money through the economy. Setting aside the cynical reaction you are probably having, this is the fundamental nature of our modern money system. Spending by the government or by the banking sector appears very much like a free give-away. ![]() So, purchases and gifts are rather indistinquishable. To all appearances, one agent has “given” money to another agent. Prices play no role whatsoever in this economic model. For example, when one agent purchases a hammer, say, from another, the money transfer is modeled, but the transfer of the hammer is not, and the price of the hammer is not specified. It is an economic model in which only the “money view” is modeled. Capital Exchange Model - For those not familiar with a capital exchange model, it can seem very strange.
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