| Subject: | [socialcredit] Re: John Hermann's "debt virus" | | Date: | Wednesday, July 28, 2004 20:09:45 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
"...loan repayment entails:
"(a) reduction of deposits in the "transferring"
bank,
"(b) reserves are commensurately freed up (ie,
released) from that transferring bank,
"(c) other formal procedures occur, signifying
repayment to the "receiving" bank and the
"liquidation of all of the loan and interest credit
involved,
"(d) the excess reserves are effectively transferred
to the ownership of the receiving bank..."
--------------------------------------
---------------------------
All that happens is that the clearing bank debits the
"transferring" bank's account, and credits the
receiving bank's account in the amount of the loan
payment. Reserves are not "freed up" but are merely
transferred from one bank to another with the
payment.
---
"(e) the excess reserves in the hands of the
receiving bank are now the basis for creating two
classes of demand deposits:"
--------------------------------------
---------------------------
Reserves are not the basis of deposits. Loans create
deposits. Reserves are necessary for settling
accounts between banks.
---
"(i) assets in the form of new loans to borrowers,
and (ii) new deposits in the P/L account of the
receiving bank, signifying increased bank revenue."
--------------------------------------
---------------------------
The bank's P/L account is not a transactional
account. The bank's ability to write checks is
limited to its balance at the clearing bank, its
balances with other banks, and its lines of credit at
other banks.
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Re: John Hermann'
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