Money is created when banks lend it
into existence (see article by Thomas Greco on page 19). When a bank provides
you with a $100,000 mortgage, it creates only the principal, which you spend and
which then circulates in the economy. The bank expects you to pay back $200,000
over the next 20 years, but it doesn't create the second $100,000 - the
interest. Instead, the bank sends you out into the tough world to battle against
everybody else to bring back the second $100,000.
The second $100.000 is indeed repaid out of the
income of the borrower but what is not considered is the origins of the money
which that repayment comes out of. Does it come out of the money the payee earns
for his labour? If so is the persons employer possesed of a large amount of cash
or is he operating his enterprise on a purely cash basis.
I ask this question in all seriousness because it
strikes at the heart of the issue of how pervassive the interest bearing debt
creatingt mechanism is in this year of Our Lord 2005.
Because of the construct of the present 'money'
supply in virtually all countries, (the 300 year old debt mechanism being
the common denominator) there is only two primary sources of the 'money required
to pay back the interest on a bank loan. The first is out of some store of non
debt interest free cash within the financial system or from the same source
as the original debt.
Regards
Trevor Crosbie
Hamilton NZ
----- Original Message -----
Sent: Sunday, April 24, 2005 6:55
AM
Subject: Re: [socialcredit] Replying to
Vic (Deus Ex Machina) -- responding to Trevor
YES! Magazine Summer 1997 Issue: Money:
Print your Own!
Beyond Greed and
Scarcity
by Bernard Lietaer
Few people have worked in and on the money system
in as many different capacities as Bernard Lietaer. He spent five years at the
Central Bank in Belgium, where his first project was the design and
implementation of the single European currency system. He was president of
Belgium's Electronic Payment System, and has developed technologies for
multinational corporations to use in managing multiple currency
environments.
He has helped developing countries improve
their hard currency earnings and taught international finance at the
University of Louvain, in his native Belgium.
Bernard Lietaer was also the general manager and
currency trader for one of the largest and most successful offshore currency
funds.
He is currently a fellow at the Center for
Sustainable Resources at the University of California at Berkeley.
YES!editor Sarah van Gelder talked to Bernard
about the possibilities for a new kind of currency better suited to building
community and sustainability. He can be reached to discuss this topic via an
Internet conference at: http://www.transaction.net/money/
SARAH : Why do you put so much hope into the
development of alternative currencies?
BERNARD : Money is like an iron ring we've put
through our noses. We've forgotten that we designed it, and it's now leading
us around. I think it's time to figure out where we want to go - in my opinion
toward sustainability and community - and then design a money system that gets
us there.
SARAH : So you would say that the design of money
is actually at the root of much else that happens, or doesn't happen, in
society?
BERNARD : That's right. While economic textbooks
claim that people and corporations are competing for markets and resources, I
claim that in reality they are competing for money - using markets and
resources to do so. So designing new money systems really amounts to
redesigning the target that orients much human effort.
Furthermore, I believe that greed and competition
are not a result of immutable human temperament; I have come to the conclusion
that greed and fear of scarcity are in fact being continuously created and
amplified as a direct result of the kind of money we are using.
For
example, we can produce more than enough food to feed everybody, and there is
definitely enough work for everybody in the world, but there is clearly not
enough money to pay for it all. The scarcity is in our national currencies. In
fact, the job of central banks is to create and maintain that currency
scarcity. The direct consequence is that we have to fight with each other in
order to survive.
Money is created when banks lend it
into existence (see article by Thomas Greco on page 19). When a bank provides
you with a $100,000 mortgage, it creates only the principal, which you spend
and which then circulates in the economy. The bank expects you to pay back
$200,000 over the next 20 years, but it doesn't create the second $100,000 -
the interest. Instead, the bank sends you out into the tough world to battle
against everybody else to bring back the second $100,000.
SARAH : So some people have to lose
in order for others to win? Some have to default on their loan in order for
others to get the money needed to pay off that interest?
BERNARD : That's right. All the
banks are doing the same thing when they lend money into existence. That is
why the decisions made by central banks, like the Federal Reserve in the US,
are so important - increased interest costs automatically determine a larger
proportion of necessary bankruptcies.
So when the bank verifies your
"creditworthiness," it is really checking whether you are capable of competing
and winning against other players - able to extract the second $100,000 that
was never created. And if you fail in that game, you lose your house or
whatever other collateral you had to put up.
SARAH : That also influences the unemployment
rate.
BERNARD : It's certainly a major factor, but
there's more to it. Information technologies increasingly allow us to attain
very good economic growth without increases in employment. I believe we're
seeing one of the last job-driven affluent periods in the US right now. As
Jeremy Rifkin argues in his book, The End of Work, jobs are basically not
going to be there anymore, even in "good times."
A study done by The International Metalworkers
Federation in Geneva predicts that within the next 30 years, 2 or 3 percent of
the world's population will be able to produce everything we need on the
planet. Even if they're off by a factor of 10, we'd still have a question of
what 80 percent of humanity will do.
My forecast is that local currencies will be a
major tool for social design in the 21st century, if for no other reasons than
employment. I don't claim that these local currencies will or should replace
national currencies; that is why I call them "complementary" currencies. The
national, competition-generating currencies will still have a role in the
competitive global market. I believe, however, that complementary local
currencies are a lot better suited to developing cooperative, local
economies.
.....
..
----- Original Message -----
Sent: Friday, April 22, 2005 4:50 PM
Subject: RE: [socialcredit] Replying to Vic (Deus
Ex Machina) -- responding to Trevor
> Hi Trevor, Congratulations on responding to Deus with such a
concise and
> accurate description of the 3 century development of what
has become the
> world's biggest, semi legal scam. Like yourself,
I cannot understand how
> any fellow human being who graduated from
primary school with ticks for the
> three "R's", and who has access to
the Internet and presumably a local
> library, can really believe that
the claimed,repeated lending of a deposit
> over and over again, to
different borrowers at the same time; is not a
> charade for the dumb
proletariat, to protect politicians in bed with the
> banks and TNC's
from a public explosion of indignation.....Reminds one of
> Lincoln's
very relevant quote that if the public really found out what the
> banks
were doing to the country, there's be a revolution before breakfast.
>
(In colonial jargon 3 R's = Reading, Riting & Rithmatic.)
>
>
While out of good taste, I have not mentioned the alternative option
that
> Deus's claimed refusal to accept that banks actually do
create a money
> substitute called credit (really interest bearing debt)
out of nothing and
> then hire it out to the country at all levels from
the state downwards, may
> not be so much an inability to understand,
as a desire to metaphorically
> muddy the water to suit a quite
different objective, but most readers will
> on their own initiative
take a cool, steady look in that direction.
>
> Sorry for having
been provoked into being so blunt.
>
>
Don Bethune of Godzone
>
###############################################
>
>
>
> -----Original Message-----
> From: Trevor Crosbie
[mailto:tamac@xtra.co.nz]
> Sent: Friday, 22 April 2005 20:36
>
To: socialcredit@elistas.com
>
Subject: Re: [socialcredit] Replying to Vic (Deus Ex Machina) --
>
responding to Trevor
>
>
> I am truly amazed at your lack
of understanding of the basic concept of debt
> creation - without
extensively revisiting the history of where money comes
> from and where
it goes the basic fact is this:
> Over three hundred years ago the
concept used by the goldsmiths to 'create'
> receipts on the gold they
held on behalf of their clients was extended or
> transferred or adopted
for use as the foundation for what we now call 'the
> money
supply'
> It comprised the notes and coins 'manufactured' by the
treasury and the
> 'credit' issued by way of loans through the banking
system. The mechanism
> used to create the credit which the banks lent
out to approved clients was
> controlled and operated by private
interests as a profit making enterprise.
> Today that profit making
enterprise has spread its influence around the
> world and dominates and
restricts the ability of representative governments
> to fullfill the
needs and expectations of those who vote them in to that
> role. Douglas
correctly identified the money power as the root cause of the
> issues
he raised in most of the books and pamphlets he wrote. He
>
unfortunately in later years linked the problems of money (debt) to
some
> form of Jewish conspiracy when in actual fact the involvement of
prominent
> Jewish families in banging and finance stemmed from the
fickle finger of
> opportunistic fate in similar vein to the adoption of
the a debt based
> mechanism as the foundation of economic activity,
originally in England and
> now around the globe.
> Until the debt
based foundation of national economies is changed there can
> be nothing
as certain as the prediction that the same issues that have made
> media
headlines for the past 50 years will continue to make them for the
>
next 5 decades. Debating the effects of the problem without recognizing
and
> rectifying (reforming) the cause is the history of politics for
centuries -
> its time for a real change.
> Regards
> Trevor
Crosbie
> Hamilton NZ
> p.s. From Jessop - Another thing,
the way you put it in your e-mail,
> Trevor, makes it sound as if the
bank claims for itself the whole debt, ie.,
> that if the bank advances
you credit of, say, $100,000, when you repay it
> the bank is $100,000
richer than it was before the transaction. How do you
> arrive at that
conclusion?
> TC Replies - The example I use is a bank created debt of
100k - over the
> life of the loan the capital is repayed plus the
interest. That interest can
> be as much as 4 times the original debt.
The interest acrues to the owners
> of the mechanism which created the
debt. If it is a government who borrows
> that 'money' from the bank who
operates the debt creation mechanism in order
> to build a road or a
hospital or a school or a railway or anything that can
> be seen as
something individuals in society as individuals cannot build for
>
themselves, then the people, through the taxes and charges imposed by
>
'their' government will pay once twice or three times over for 'their'
>
infrastructure rather than just once. What is more inflationary
Jessop,
> paying 100k for a sewerage scheme or paying 2,3or 400k for
it?
> TC
>
> ----- Original Message -----
> From:
"Jessop Sutton" <sutton@kingsley.co.za>
> To: <socialcredit@elistas.com>
>
Sent: Thursday, April 21, 2005 4:55 AM
> Subject: Re: [socialcredit]
Replying to Vic (Deus Ex Machina) -- responding
> to Trevor
>
>
> > Responding to Trevor.
> >
> > Trevor,
you wrote:-
> > "The only way forward is to back interest bearing
debt out of the system
> > by
> > using the power of credit,
controlled by the people, to provide essential
> > infratstructure,
free of debt, for future generations as a starting point
> > for the
introduction of a Social Credit economy."
> >
> > I see Bill
Ryan has replied to this.
> > =============================
>
>
> > Trevor, you also says:-
> > "That process is driven
by the need to service an ever growing level of
> > international,
national, regional, company and personal debt - all owed to
> > the
owner operators of the debt mechanism."
> >
> > This often
puzzles me. Why is interest charged by a banker for his
> >
services
> > seen as anything different than the 'imple markup
applied by any industry
> > to
> > provide a dividend to
it's shareholders? Are the holders of shares in
> > banks
>
> less entitled to a return of their investment than are the shareholders
on
> > one of the multi-national oil corporations? Or even, say, of
the movie and
> > entertainment industries which provide a service to
those who want to make
> > use of it, and a good return for those
invested in the industry?
> >
> > Here's a quote very much
to the point from a recent e-mail by our Margeret
> > Legum, a
lobbyist for a better deal for the poor:-
> > "If neither the world's
consumers nor its farmers are doing well out of
> > agriculture, who
is benefiting? It is our old friends the multinational
> >
corporations and supermarkets. Mergers, acquisitions and interlinking
have
> > reduced their number to about five groups that control most
of the world's
> > staple food economy from supplying seed to buying
produce, to processing
> > and
> > selling. Since they
are virtual monopolies they have a strong influence
> > over
>
> prices. They are exceptionally profitable." [SANE Views Vol.5, No.8,
19
> > April
> > 2005.]
> >
> > Are these
multinationals more entitled to reward their investers than are
> >
the
> > banks? Bill Ryan not so long ago made the point excellently
on this list
> > that
> > interest is merely the banks
charge for its services.
> > =============
> >
> >
Another thing, the way you put it in your e-mail, Trevor, makes it
sound
> > as
> > if the bank claims for itself the whole
debt, ie., that if the bank
> > advances
> > you credit of,
say, $100,000, when you repay it the bank is $100,000
> >
richer
> > than it was before the transaction. How do you arrive at
that conclusion?
> >
> > Jessop.
>
>
>
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