Paul C wrote in [OPE-L:3688]:
> As a stock of money on the other hand, there is no simple
> mechanism whereby the stock will adjust to changes in the level
> of real wealth. The stock of money is, under a credit money system,
> equivalent to some subset of the total outstanding debt in the
> economy. This is driven
> a) by the imbalances between sectors' cash flows, in particular
> by the tendancy of the rentier sector to be in financial surplus
Please explain this tendency.
> b) by the polarisation of the population of capitals into firms
> who are forced to increase their gearing ratio and firms able
> to reduce their gearing ratio
What is the "gearing ratio"?
> c) by the extent of the de-monetization of debt by the issue of
> equities
In solidarity,
Jerry