from : How an Economy Grows and Why It Crashes<<小岛经济学>>,Peter D. Schiff Andrew J. Schiff
前提：islander will eat 1 fish per day .
About employee and employer
A worker is free to :
- underconsume to build a net(capital ).
- take out a business loan to nuy a net.
- work for someone who already has a net.
fish transport:Finnigan,a strong man,can deliver 100 fish per day,at a 2% freight fee,he earned 2 fish per day. Murray,having taken out a business loan to build a fish cart,he can deliver 300 fish per day,at a 1% rate,he earned 3 fish per day. assuming Finnigan can deliver 400 fish with a cart,as Finnigan can generate 4 fish in income at a 1% rate,Murray offer him 3 fish as employee.
about paper money: people love getting stuff for free ,they hate paying taxes .if he could find a way to make it look like he was giving something to the islanders for free ,How could they give away more than they took ?
After storm destroy,many of our citizens are hutless and fishless,politician say ‘I will institute a government reconstruction program for our neediest citizens to repair the damage.’
But, there were not enough fish reserves to finance the spending plans.The government would issue paper money called Fish Reserve Notes,fish:note 1:1.To get support ,government hand out notes to fund .
Soon,more notes than the government ‘s account in bank had fish to redeem(兑换？), use official fish (generate new fish from discarded fish parts) to pay back depositors.fish:note 9:10 (10 official fish from 9 genuine fish)
government establish a fishing department.To guarantee people ,create a new agency insurance corporation with Senate behind their deposits.
then official fish:real fish -> 5:4 -> 3:2 -> 2:1 .now most ate 2 per day ,at minimum .prices for every thing had to go up to keep pace with the diminished nutritional value of fish. ‘fishflatten’ was born and discoraged savings , unemployment high.There is no fish in the bank.
One island,Sinopia,catch fish by hand,no savings,bank,credit,business,offered to exchange fish for fish reserve notes.The transactions were a huge boom to Usonia,ie boost local economy ,deposits of fish swell .fishflation disappear .
Sinopia can build factory ,sold these goods to Usonians for fish reserve notes.
Reality check:Many of these dollars held by foreigners are typically deposited in American banks, where they can be borrowed by Americans. That way we can spend even if we don’t save.
Usonia work transfer to “service sector” and less capital intense ,e.g. chefs,story teller .
About export
trade surplus :the country exported much more than it import(sells more aboard than it ).trade deficit is the reverse . A country with trade surplus will create a international demand for its currency .Strong trading positions tend to strengthen a country ‘s currency .BUt when a country ‘s currency rises,its products become more expensive . “a global currency war “–depress currency . In addition,a cheap currency simultaneousLy makes imports morexpensive.
One island leader withdraw much more fish from bank , causing Usonia fishflation.Usonia leaders close the bank ‘s fish window to foreign deposits. This causes value of Notes to drop,but it finally stablize.Although the gap between Senate spending and what it raised in taxes widens,
the notes that are used to pay for fresh fish from foreign sources are exported and never are redeemed for fish .
about hut loan market
- Post title：island_economy
- Post author：冬柠
- Create time：2022-08-13 11:34:07
- Post link：island-economy/
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