Re: Global Financial Crisis scenarios

The parameters I hold unvariable in the consideration, is the number of people and their holding preferences (the saving rate is 0, or the amount saved does not change).

I do not consider economy growth as input to the money value function. Some do, but that is based on flaky statistics, which are trusted even when they fail. I consider the growth thing as an allegedly plausible way to get out of the current mess.

This is flat-out wrong. Consider there are twice as many goods and services with the same amount of money in circulation. How are you going to sell all these new articles unless the purchasing power of coin increases (that is prices decrease), provided all other things like velocity of money stay the same?

I don't care about volume of goods or velocity of money. Goods and services are sold for goods and services, money oils the trade by enabling indirect trade, there is always enough money, and with bitcoin we don't even have to worry about changing between notes and coins of different number of units.

There could be enough money only if the velocity of money turnover increases in the case the amount of money stays the same while the volume of goods increases in the economy. If you are arguing with this, it proves that you just don't know how money works.

There is always enough money. If you are arguing with this, consult the policy of the reichsbank of the weimar republic, as expressed by its president Rudolf Havenstein. During the whole hyperinflation, he thought there were not enough money. (Because the value of the sum of money decreased, even if the amount of marks increased). You could also read any of the austrian economic writers.

At first you stated that the economy growth is not relevant to the money value function ("I do not consider economy growth as input to the money value function"), now you are saying that "there is always enough money". Okay, but would you care to explain how the latter is related to the former (provided the amount of money in circulation stays the same)?

More goods and services mean more wealth, because that is the definition of wealth. More goods and services compared to last year, means that the productivity has gone up. If this happens and nothing else changes, prices measured in money go down and the value of the money goes up, because that is the definition of value of money. So you don't need more money. You never need more money, a fixed supply is always enough.