Post
Topic
Board Economics
Re: Inflation and Deflation of Price and Money Supply
by
Watsmaker
on 28/08/2018, 17:27:54 UTC
If I'm an intermediate and all values of the apple are static, then of course I get part of the value creation.

But you can also see this differently.

Suppose that yesterday, I really wanted to possess an apple.  I bought an apple for 6 eggs, and I valued it 10 eggs.  So I had a value creation of 4 eggs for that.

However, today I realize that I don't like having an apple any more.  I value the apple today only 2 eggs.   I now sell that apple to you for 6 eggs.  I have AGAIN a value creation today of 4 eggs by this act.

If you have valued an apple all the time 8 eggs, then you could have bought it directly yesterday for 6 eggs (market price) and gained 2 eggs of value.  When you buy the apple from me you also pay 6 eggs, and you gain 2 eggs of value.

So if you directly buy the apple, you win 2 eggs and I, nothing.  "total gain 2 eggs"

If I buy the apple, and then sell it to you, I win 4 eggs yesterday, 4 eggs today, and you win 2 eggs in value.  "total gain 10 eggs".

You can say: yes, but your change in mood made you LOOSE 8 eggs.  No.  Value is only instantaneously and subjective.  I cannot compare value to me yesterday, with value to me today.  I can only say, at each instant, what I value and what I don't value.

Appreciation changes.  Subjective value changes.