| Subject: | Re: [socialcredit] money and credit creation -- reply to Vic | | Date: | Monday, May 2, 2005 14:23:46 (+1000) | | From: | Vic Bridger <socred @.......au>
|
| In reply to: | Message 1153 (written by Jessop Sutton) |
I am sorry again Jessop that you are not prepared to accept the truth and
facts. If you believe that lending by banks creates deposits so be it, but I
do not understand why you continue to express your opinion on this list.
There is ample evidence from authorities that the banks in fact DO create
deposits and in doing so increase the money supply.
I am also sorry that you did not get the significance in the little story
that I sent as an attachment. As the title suggests, it takes Imagination.
This has apparently escaped you.
With regard to your question on cash (bank notes) I will disregard the whole
of the content because it is not relevant to Social Credit.The only point I
wish to make is that they have nothing to do with "value" as you put it.
Notes and coins represent a very small fraction of the money supply and any
value that may exist is that which we choose to extend to them. They are
money because we choose to accept them as such in the same way that we
choose to accept other pieces of paper (cheques).
One of the problems as I see it is that formal training has left many people
arguing over things such as money, interest, and lately "Wealth".
I repeat (probably for the last time) the definition of money in its
entirety which is accepted by Social Crediters as did Douglas.
"Money is any medium which has reached such a degree of acceptability that
no matter of what it is made or why people want it, no one will refuse to
accept it in exchange for his goods and services if he is a willing seller".
If you do not accept that definition then say good-bye because no headway
will ever be made.
Wealth and Money are not the same thing. Wealth for a Social Crediter is in
Consumption. If you do not accept that I fail to understand why you continue
to express your thoughts on this list. It appears to me that if you have
read anything on Social Credit or Douglas, it is very limited and if you
wish to learn more about Social Credit that you first become acquainted with
the physical facts of how the current financial system operates.
One of the writers on this list refers to "owed-wealth" and "owned-wealth".
This may be satisfactory for him but to a Social Crediter it is a nonsense.
Learn the meanings attached to Social Credit terminology and do not attempt
to apply orthodox economic meanings (which are usually variable) to Social
Credit.
Finally, as I pointed out in a previous posting there is much importance
attached to money and finance etc. whereas the important factor is the real
physical occurrences in our society.This appears a stumbling block to those
versed in the black magic of finance.
If I have come on strong it is because so much time has been wasted and
continues to be wasted on those who have eyes but will not see.
Vic Bridger
----- Original Message
From: "Jessop Sutton" <sutton@kingsley.co.za>
To: <socialcredit@elistas.com>
Sent: Sunday, May 01, 2005 1:52 AM
Subject: Re: [socialcredit] money and credit creation -- reply to Vic
> On Friday 29 Apr 2005 6:44 am, Vic Bridger wrote:
> > I am sorry Jessop but you have got it completely back the front. Loans
do
> > not dome from depositors deposits. It would be illegal for a bank to
lend
> > out depositors money. Have you ever heard of anyone having their
deposits
> > reduced because the bank has lent some of it out? Deposits come from
loans.
> > I have attached an article written a few years ago by one of original
> > thinkers and who does think laterally. This little story may assist you
> > (and possibly others)
> > Vic Bridger
> =====================
>
> No Vic, I am not wrong. A little bit of original thought will tell you
that
> what I posted earlier today in reply to Don is the right explanation.
>
> The Sancho Panza piece -- do you not think it is somewhat naive? I think
it is
> abit puerile myself, but it will catch the attention of a gullible public.
> This, and others like it such as The Money Myth Exploded, are patently
> written by people who set out to prove what they already believe, and it's
> not hard to find the flaw in their parables. These are food for any who
also
> are set to be assured about what they already believe. The stories are not
> really difficult to fault by any thoughtful person.
>
> Vic, I don't know what you really believe about cash (bank notes), but it
is
> simply a representation of value that already exists; it is a means of
> transporting 'credit' from one point to another, if you like. Moving cash
in
> and out of bank accounts does not affect the market liquidity, it only
> changes the composition of that resource. Aditional cash (notes) are only
> brought into the system by the Reserve Bank as and when required to
support
> the needs of commerce in the country -- the increase in activity comes
first,
> then additional supplies of notes are brought in to play. (Bill Ryan once
> argued convincingly on this list that money creation is a result of total
> economic activity.) Control over the extension of credit by mopping up
market
> liquidity at times and releasing it again when required is a useful means
by
> which the monetary authority can regulate the process of money creation.
Tim
> Knight puts it very nicely as:-
>
> "Originally, with gold-plus-debt finance, many saw the fractional reserve
> system as a 'multiplier' or 'catalyst' in increasing the 'money supply'
each
> time the gold came back in and went out again. In fact, it never was. It
> was always a prudential limiting factor, limiting the total of owed-wealth
> assets a bank was allowed to administer to a multiple of gold deposits
> actually held. More recently, with debt-only finance, the fractional
reserve
> system is a prudential administrative limiting factor; limiting the total
of
> owed-wealth assets a bank was allowed to administer to a multiple of
equity.
> In all cases, the fractional reserve system is intended to ensure that if
> some of the bank's owed-wealth assets go belly-up, it is the shareholders
who
> suffer rather than the depositors." The fractional reserve system, of
course,
> requires that there be cash deposited with the Reseve Bank.
>
> Jessop.
> =======================
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