| Subject: | Re: [socialcredit] Re: The role of bank reserves | | Date: | Saturday, July 31, 2004 23:18:43 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
"The lady protests too much, methinks."
Hamlet: Act 3, Scene 2.
--- John Hermann <hermann@picknowl.com.au> wrote:
> At 08:55 AM 30/07/2004 -0700, William Ryan wrote:
>
> >[Hermann] Preliminary comment: The juvenile
> >comment "John Hermann's nutty debt virus theory"
> >says more about the person using it than the person
> >to whom it is directed. According to Prof Ed
> Flaherty,
> >who seems to have made a study of this subject, the
> >central thesis of "debt virus" is that there exists
> in the
> >economy an insufficient quantity of money to repay
> both
> >the principal and the interest on all the currently
> >outstanding debt. This viewpoint is so wildly
> >divergent from anything I have espoused that I can
> >only question the motives and/or mental stability
> of
> >the person who insists on repeating the lie.
> >------------------------------------
>
> [Ryan] ".... You have been off-topic from day
> one ".
>
> This remark brings us to the matter of
> hypocrisy.
>
> The occasion for these comments was my response
> to
> an extensive and prolonged discussion,
> appearing on
> the social credit list, of interest and debt
> growth. For a
> subject which Bill claims is "off-topic"
> (whatever that
> might happen to mean) it seems to have
> exercised the
> attention of members of the list to an
> inordinate extent.
> You might say that many members of the list
> seem to
> be fascinated by the topic. Not only that, but
> subscribers
> have been allowed to import vast amounts of
> material on
> this topic from other lists into this forum for
> discussion
> purposes. Consistency is required -- either
> censor ALL
> of the material on this subject or belt up. No
> more
> humbug.
>
> >[Ryan] I'm sorry John, but your theory IS debt
> virus. ....
> >You said that "interest is collected on interest"
> when
> >the banker invests rather than spends his income--
> >therefore debt increases exponentially. That's
> debt
> >virus.
>
> Total nonsense Bill. You do not possess the
> slightest
> understanding of how debt compounds. I can help
> you
> to understand the subject, if you would
> overcome your
> innate stubbornness and make an effort to
> learn.
>
> Bill's statement above is demonstrably untrue
> for the
> following reasons:
>
> Lie number 1: That my comments on compounding
> debt somehow referred to bankers' investments.
> I said
> nothing about bankers, nor was it implied or
> intended.
> The deliberate repetition of this lie is a
> diversionary
> tactic designed to obfuscate.
>
> Lie number 2: That I am pushing some kind of
> "theory". That's a creation of Bill's fevered
> imagination.
>
> Lie number 3: Relates to Bill's claim to have
> some
> insight about how interest and debt compounds.
> He does
> not. His claims are nothing other than bluff
> and bluster.
> He is, in reality, supremely ignorant of these
> matters.
>
> Lie number 4: That I am an adherent of some
> nutty
> debt-virus hypothesis. I gave the correct
> definition of
> the hypothesis (incidentally, does Bill know
> the difference
> between a theory and a hypothesis?) as obtained
> from
> the web site of Prof Ed Flaherty, whose
> credentials on
> economic matters I would suggest are vastly
> superior to
> Bill's credentials. Bill's version of the
> hypothesis is
> arbitrary, idiosyncratic and ridiculous.
>
> >The correct explanation for exponentially
> increasing
> >debt is C. H. Douglas's A+B Theorem.
>
> And now we come to another big lie - Bill's
> particular
> version of the thoughts of Douglas which he
> pretends to
> interpret on behalf of others who subscribe to
> the list.
> Bill has selectively chosen items from the
> Douglas menu
> which conform to his ideological predisposition
> and "free
> market" prejudices, and seems intent on
> suppressing
> everything else that Douglas said. I have
> noticed that Bill
> carefully avoids mentioning anything Douglas
> said about
> the role of "interest" or "savings" in the
> context of
> purchasing power.
>
> Incidentally, the word "theorem" is
> conventionally only
> used in a mathematical context. To use it in any
> other
> context is transparently pretentious.
>
> *The problem with using the word "funds" is that it
> might be confused with "money". And reserves are not
> part of the money supply.*
> ------------------------------------
> That is purely arbitrary definition. It is defined
> that way to avoid double counting in the statistics.
> Reserves are that portion of the money supply that
> are assets of the banks held at other banks.
>
> It is not arbitrary. Reserves are never
> accounted by
> central banks as being part of the money supply.
> And that means any cash in the banker's hands
> and
> any deposit held in the name of a bank --
> including
> any deposit held by a bank at another bank.
>
> A reasonably broad definition of the "money
> supply"
> - M3 - is conventionally taken to be currency
> (cash
> in the hands of the public) plus all bank
> deposits of
> the private non-bank sector.
>
> With credit expansion through loans, the banks'
> deposit
> liabilities outpace their deposit assets.
>
> That's just a convoluted way of saying there is
> a
> temporary deficit of the required reserves for
> the
> lending bank.
>
> But let's say that a bank receives a deposit in
> transfer
> from another bank. The clearing bank credits the
> bank
> for the deposit; the other bank is debited. The
> bank
> in turn credits its customer for the deposit. In
> this
> case there is no credit expansion.
>
> Correct. To complete the statement one should
> say
> that reserves are also transferred between the
> banks,
> in addition to the monetary transfer.
>
> So the money supply in a fractional reserve system
> is
> two-tiered: one is for clearings between banks; the
> other
> is for clearings between members of the public.
>
> If by "clearings between banks" you mean the
>
=== message truncated ===
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