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Message 1165
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| Subject: | [socialcredit] Re: Ryan's debt virus bogey | | Date: | Sunday, May 1, 2005 05:50:10 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
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"A significant part of interest income
is always transformed into the general
reserves of lending institutions."
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Actually, this statement is completely
false. I think you are confusing
reserves with capital adequacy
requirements. Reserves as historically
defined and also in the regulations are
deposits the banks hold (required or
not) with their central bank, available
to settle accounts between banks, plus
vault and till cash. The totality of
clearing balances does not change with
interest income to the commercial
banks. The totality changes only with
"open market" transactions by the
central bank, or change in the ratio
between clearing balances and vault
(and till) cash, or cash held by the
public. Moreover, the totality of
system-wide clearing balances does not
change with change to the required
"reserve to deposit ratio," if any.
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--- "William B. Ryan" <w_b_ryan@yahoo.com> wrote:
> This is debt virus, John,
[snipped]
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