3 ms·
"But with each pass, there was a transaction fee." That's always the mistake with leakages. Somebody earned that fee, and they spent it back into the economy.
by neilwilson 6y ago
"But with each pass, there was a transaction fee."
That's always the mistake with leakages. Somebody earned that fee, and they spent it back into the economy. Transaction fees are somebody's wages.
Similarly if there are imports paid for in the 'money' of the area, and they don't use that type of money anywhere else then the only place those sending the imports can use that 'money' is on the exports of the area.
Both of these are classic mistakes of analysis.
- interest and fees disappear somewhere rather than being the wages of bankers and financial people.
- there is only one type of money and it is used everywhere, the Elite Dangerous 'credit', when in reality we have floating exchange rate currencies.
If you are finding that your exports from an area don't pay for your imports, then you are in too big a currency union and need to break away with your own money. Whoever else you are in a fixed exchange rate union with is refusing to do a transfer back to your area. And that is an act of mercantilism.