Just focus on Productivity

  The National Central Bank should ignore things like profits and let the speculators, the investors, the old guys who stare at the Shanghai Index all day worry about that. Your primary goal is productivity and objectives. Because profit and loss is all imaginative. None of it is real. The only profit and loss that people care about is the legally binding one. Meaning the profit and loss stated in the value of their national currencies.

  It does not matter if the value of my profit depreciated 99 percent against cotton, gold, iron, or nickel. All that matters is that I still reported a profit in fiat money. So a Japanese only cares that he reported a profit in Yen. He does not care if he reported a loss if that value was converted to Euros. Likewise, a European only cares if he reported a profit in Euros, he does not care if its actually a loss if converted to RMB. Because the only obligations he has to worry about is paying his employees and being able to deliver tax to his state. And both are legally obligated to accept payment in fiat money.

 Even if the contract demanded that payment be paid in some physical or tangible good. The courts are willing to accept payment in the form of fiat money, because that is the law.

 

  Ultimately, it is the state that becomes the arbiter of whether or not the economy remains profitable or becomes unprofitable. And that can be achieved by controlling the money supply. Thus when the government operates a loose monetary policy. Running almost any business would appear profitable. However when the government operates a tight monetary policy, profit seems to escape everyone. This is because if A wishes to report a surplus, B must report a deficit with A. However if the money supply remains loose, both A and B can report a surplus because new money is being created out of thin air.