AURICOIN
Published in

AURICOIN

The Neutrality of Auricoin Money

Auricoin money has a very peculiar characteristic since it is NEUTRAL, which makes it a fundamental pillar in economic and social development.

The need and obligation of the neutrality of money was left in oblivion, but it was this that contributed to define the classical doctrine and the development of Economic Science.

The quantity theory of money is one of the oldest ideas in economic science, its origins date back to the 18th century with authors such as David Hume and Richard Cantillon.

The quantitative theory implies neutrality in the perspective of comparative statics; it is the case that they are called “quantitative neutrality”. In his work “Of Money”, David Hume points out: “money is nothing more than the representation of labor and goods, and it serves only as a method of evaluating or estimating these.

The fact that there is monetary abundance, when a greater amount of money represents the same amount of goods, cannot have any effect, either favorable or unfavorable, within the same country.

When the money supply increases, the price should not rise, since the good or the service has a cost to produce it, as long as the currency is stable, such as Auricoin money.

In this, there are four important theoretical insights:

The first when he says “money is nothing more than the representation of work and goods, and serves only as a method of giving value to the good or service by representing it in money or estimating these” that is, money is a unit of account;

The second refers to the possibility that nominal changes in the money supply should not affect real variables of the good or service;

The third indicates that in the long run money is neutral in the economic system; and

The fourth, points out that money has no real effects temporarily.

The role of Auricoin money in the economic system is to be a unit of account and a medium of exchange, money is a common measure of the value of different goods. That is, it will serve to set the monetary price at which the different goods produced by farmers, farmers or industrialists, etc. will be sold.

It is necessary that the Auricoin currency corresponds, in a real and intrinsic way, that is, in the price of the raw material, of the work and the utility that it is desired to receive for the good or the service, or to the things that in exchange for it receive, in this way a strong, real and non-speculative economy is made.

Wherever Auricoin money passes, which has entered the circulation, consumption will naturally increase; but this consumption will be more or less large depending on the case, and will affect to a greater or lesser scale certain species of articles or merchandise, according to the whim of those who acquire the Auricoin money.

On the other hand, in the monetary stock it is not only associated with the price level, there is a point at which its relationship with the interest rate is also appreciated. What type of relationship is established between these two variables? As the amount of money increases, the interest rate is reduced because the cost of credit becomes cheaper; thereby increasing the spending of economic agents in the short term, according to the creators of Auricoin money, this can have consequences lasting and is what produces economic and social development.

For example, the structure of the economy can change if aggregate investment increases as a result of the fall in the interest rate. Likewise, a change in the relative price structure results in a change in the expense structure. The above implies not monetary neutrality and this is an aspect that should be emphasized since this is a cost of production.

Auricoin money does not affect the real variables of the economic system constituting the body of thought that we know as the quantity theory of money. An exogenous change in the money supply does not cause a proportional change in the absolute level of prices.

From these ideas, it follows that to find the equilibrium price level, we must proceed in the markets for goods and labor (real sector), and they determine the relative prices and the quantities of goods exchanged in equilibrium.

As Auricoin money is neutral, it is possible to generate stability in the movement of prices; given that the average growth rate of the stock of money in circulation is seen as the determinant of price trends in the long run.

However, the previous conclusions, we can say that the monetary policy developed in Auricoin money, is important for classical and neoclassical economists in the sense that a monetary policy that resulted in stable amounts of money. It in turn causes the existence of stable prices.

For Auricoin, the doctrine he uses is that the monetary increase should not have an effect on the price level and it does not affect relative prices.

The concept of the general price level must be replaced by an investigation of the causes of changes in relative prices (cost) and their effect on production.

Consequently, if Auricoin intervenes, for example, devaluing or increasing the value as a consequence of the law of supply or demand, as applied to a good, it will distort the role that this variable plays, which, far from coordinating the decisions of the agents private companies, will modify relative prices in favor of investment goods, which will ultimately translate into an economic crisis.

Indeed, from the Auricoin perspective, economic crises occur when what we use as money is not neutral since it makes it susceptible to external influences, configuring a relative price structure different from that which would exist in a world without money or in a stable money economy.

The equilibrium situation with full employment proposed by Auricoin is a case that can occur with the education of the entire Community, and once said balance is achieved, it will be maintained.

If we don’t rethink money, economic crises will be characterized by periods of unemployment accompanied by deflation. Fluctuations in output and employment are the result of shortcomings in effective demand, basically caused by instability in investment, whose movements are closely related to speculative markets.

What was really created with Auricoin money was not a new class of money, what I believe Auricoin, was the thing that has all the characteristics that money should have, so that it can function as Medium of Exchange, Unit of Account and Deposit of Value. The dream of all economists throughout the history of the world economy and that despite having theories, since the 18th century, the duty of money, a JUST medium of exchange, had never been created before.

Now with Auricoin money, economic stability can be achieved, which will bring development, wealth and prosperity.

This Auricoin alone cannot achieve it; it is the task of the entire Community. We must change our thinking and ask ourselves if they want an economic change that benefits all humanity. Do not wait for Auricoin to give you, since Auricoin is within you, ask yourself better each member of the Community How can I contribute to help the adoption of Auricoin money by all people?

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store