When the central banks are increasing the money supply, the quantity theory shows that the inflation is going up in the long run. This means that the money is less worth than before. The quantity theory implies that decreasing the money supply, will make the prices going down, and this implies deflation, and that the money is being more worth in value.
The presidents, the prime ministers, the governments and the parliament different places can take decisions on whether the money supply should go up, be constant, or go down. We all understand that it is not sensible with hyperinflation, and that people and organizations must get bills with higher amounts than before since the central bank is blowing up the money supply. Instead one should think about what one is doing, and we have many examples from earlier wars on that inflation and printing of new money not always is the sensible one can do.
In the interwar period, people had for example to bring with them a a wheelbarrow with money to pay for a packet of chewing gum. That cannot be a desired development. That best thing is that we do not have to bring too much money with us when treating transactions, and of course there are some exceptions when people pay much for one specific transaction, and that can be a house, a cottage, and several other things. Transaction analysis is always about doing analysis with transactions, and finding what they are, and what this means, and which philosophy and meaning it has. But too high prices in an economy should not be desired, and we should therefore have an appropriate level of prices when doing economic transactions with and without established markets.
So, what should we do in different economies? We should link inflation of money to gold standard or silver standard, and we should have real assets with value behind the transactions that we are doing. Otherwise, we risk that the money supply from time to time in different countries, does not imply real values in different countries. The money must namely reflect production hours or use of labor different places in the markets and among people and among the organizations.
We should own things and assets, and there should be many values in societies in 2030, in longer into the future. And we should be happy. But there is difficult to think about the business life in different countries as being not present.
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Sverre Larsen
Kristiansand, Norway
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