When the money is circulated at a rapid pace, the economy is developed and the country revives!
If the money is not circulated or being kept in bank or individuals hold it in cash, the money fails to play its original role. If the money is not circulated, the economy will die and the country will be poor.
In case that 1 trillion won is flowed into a construction company and the firm builds a building or an apartment unit, the money is spent for personnel expenses, materials costs and other expenditures. After all, the remaining one is such structure as building or apartment.
However, it means that the 1 trillion won money has not disappeared, rather a bigger money comes back again thanks to the profit occurrence.
If the speed of the money circulation is faster two or three times a year, the money piles up and such structures as building and apartment will increase in number and value.
The same theory is applied to the manufacturing, service and other areas.
On the place where the money flowed, such trace as goods or service remains. Likewise, the economy will goes well when the speed of the money circulation is fast.
Accordingly, the amount of the money printed by the government is not important. The speed of the money flow in the frame of economy, namely "turn over," is important. There is no study called "Money Dynamics." It is just a new theory that the writer defines for explanation.
The stopped money and the money that does not flow is dead money! The money should be circulated fast and the rapidly flowing money is the living money!
The study called "Fluid Dynamics" is similar to this. The speed (flow velocity) and flux of such fluid as liquid or gas change according to difference of temperature, density and pressure, etc.
For an instance, river water flows at a rapid pace when the slope of river bed is steep, but it does not flow when the river bed is flat. However, if there is a difference of temperature or density under the situation of flat slope, it flows at a slow pace.
To that extent, the angle of inclination becomes a variable with high weight.
If water is kept in a dam, it does not flow and it will decay. Under such a situation, likewise, if there is a difference of temperature and density between the above and the below of the water, the flow occurs by itself.
Because of such a difference of temperature and density, big rivers are flowing in such a broad ocean as the Pacific.
In a water pipe, if fluid pressure is strong on one side, the tap water flows at a rapid pace, but if it is weak, the tap water does not come out smoothly. As a water tank is located on the rooftop at a high-rise building, the nearer to the rooftop the apartment is, the weaker the water current of shower becomes, and vice versa.
For a rapid flow velocity in a water pipe, the difference of pressure should be big.
Then, what can speed up the money flow in economics The government’s role should be focused on finding out a variable with high weight and carrying out it!
If the difference of the exchange rates between countries is big, the money is flowing out at a rapid pace. In case of a difference of interest rates between countries, the money is also flowing out to overseas.
If the manufacturing or construction field is activated, the money is flowing into. If a new field such as the 4th industrial area is created or the service industry like financial products is developed, the money is also flowing into.
The government should,
- speed up the money flow!
- make money flow into enterprises!
- stimulate human nature on wealth!
People in the world wish to make more money. It needs to lure and stimulate them to have entrepreneurship, challenge spirit and venture spirit.
To do so, social climate should be changed and institutional support should follow.
On the contrary, if a climate under which both hard-working people and those loafing around every day can live alike is created, who will work hard or who will manage enterprise
As company management is very difficult and it carries a high risk, not everyone can establish a business and everyone ought not to do it. In case of a failure, they should live for life as credit delinquent or bankrupt. The government does not take responsibility and cannot take responsibility.
Nevertheless, the government encourages youths to establish a business unconditionally, even though it does not take responsibility. It is what our government is doing now.
If populism policies are implemented excessively, all the people like it temporarily, but the state finance will be depleted sooner or later. In case of giving 1 trillion won in national finance to specific people, the money will not be increased even if one year has passed and it will be disappeared without inducing production.
Such a money is dead money! Money should be used to make it alive.
If labor aristocrats, who live idle without working, enjoy better life and the number of those threatening hard-working businessmen without working increases, how does the country go well Equal society means the equality of opportunity, not the equality of wealth or equality of the quality of life.
When those living better off and those living worse off are classified and a society where people can live better off according to ability and efforts is guaranteed, not only individuals but also the country will prosper.
Written by Jung Yeon-tae, Chairman of the 4th Industrial Revolution Policy Forum