Potential Money and Bubbles

Potential Money

Andre Willers

19 Sep 2014

Synopsis :

The concept of Potential Money is used to show the mechanics of Bubble inflation .

 

Discussion :

1.Potential Money (PM) of an Amount (M) is the sum of all the money that can be made by any scheme using M .

2.PM can be infinite , but is usually limited by the imagination of the user .

3. Examine case of two parties , Seller (S) and Buyer (B)

4. The Buyer makes an offer to the seller , who can accept or reject the offer .

5. The crucial point : there is a time-delay which causes imbalances in the Potential Money of the two parties .

6. The person making the offer (the Buyer) is at a disadvantage insofar as it appears as if he has less Potential Money .

					Potential Money gradients per transaction
	Buyer		Transaction	Direction		Seller
	-r		Offer in transit	-->		0
	-r					+r
	-r		Accept in transit	<-- o:p="">

0

-r

Reject in transit

<-- o:p="">

0

0

0

Balance iro buyer

-r

Offer in transit

-r

Accept/reject in transit

Balance iro seller

0

Always

During transit times , the Buyer is at a potential disadvantage

7.What does this mean ?

An experienced negotiater or salesman will always try to get the other party to make the initial offer .

“What do you want for it?”

 

8.The interest on the Potential Money in transit acts as an attractor and also gets added to the Potential Money of the party .

Since PM can be very large and busily in transit , this will act like an inflator to blow bubbles in the values of Potential Money , with runaway

Positive feedback .

Monetary Bubbles seem to be inherent in any type of transaction .

9.Potential Money interest rate :

Since this is the major culprit , managing it seems to be the best option .

10 Taxation :

Taxing Potential Money Interest seems promising , though I can hear the screams now .

 

9. This model can be easily adapted to physics .

See http://andreswhy.blogspot.com/2011/04/slingshots-dark-matter-and-dark-energy.html

Have potential fun .

Especially the Potential tax that has to be paid in real money !

Potentially yours

Andre

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