PURCHASING POWER
Sir,-Possibly Mr. K. O’Brien thinks he has made something clear. What is clear enough is the fact that any attempt to give an appearance of mathematical accuracy to the assumption that production is carried on in "cycles," isolated islands in an ocean of time, can only give us a jumble of nonsense, Production is continuous. If in ten years an equipment costs its original price in repairs and replacement, it will usually have more than paid for itself in that time; and every payment made, over those ten years, for repairs and replacement, will give purchasing power equal to the cost, and cost and purchasing power will originate together. If reserves accumulate they, invested, will circulate. It is not correct that the Report of the Monetary Commission "postulates" on page 361 that a decrease in our overseas assets will reduce our purchasing power. What is there stated is that money taken out of New Zealand to be spent abroad reduces both our money supply and our overseas assets. Money coming here has, of course, the opposite effects. If Mr. O’Brien wishes to be really useful he had better get thoughts of "cycle N" out of his head, Like the "sap," it is a mare’s nest.
J.
JOHNSTONE
(Manurewa).
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New Zealand Listener, Volume 35, Issue 902, 16 November 1956, Page 5
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210PURCHASING POWER New Zealand Listener, Volume 35, Issue 902, 16 November 1956, Page 5
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