That's why I simply quoted the statement without indicating approval.
I believe it is essential to be clear which definition of money we are using,
because I think the M2, M3 etc. definitions are attempts to obscure arguments
such as those of Douglas and to make the facts fit orthodox theory.
Money in the sense Douglas uses it is what has since his time become called M1,
notes and coins in circulation and demand deposits with the financial
institutions.
John R.
>From: "William B. Ryan"
<w_b_ryan@yahoo.com>
>Reply-To: socialcredit@elistas.com
>To:
socialcredit@elistas.com
>Subject: RE: [socialcredit] Compound Interest?
>Date:
Tue, 31 May 2005 14:28:13 -0700 (PDT)
>
>Our nitpicky friend Keith Wilde would
argue that's
>hyperbole--surely it could not be the sole function.
>
>At any
rate, the definition improperly differentiates
>money from bank credit. Bank
credit in the form of
>transferable deposits is money in today's
economy--
>practically the only money.
>
>The Douglas theory is not particularly
concerned with
>the
definition of M1 or any arbitrary definition about
>the quantity or velocity of
money.
>
>The focus of attention is on the flow of costs
>("prices") being
impressed to the point of retail in
>comparison to the purchasing power
simultaneously
>being made effective in the hands of consumers.
>-
>
>
>--- John
G Rawson <johngrawson@hotmail.com> wrote:
>
>Part of a quote recorded by our 1956
Royal Comm.
>Report:
>
>Mcleod, "The Theory of Credit" 2nd Edition 1894,
Page
>607 -
>
>"The fact is that Bankers are not dealers in money;
>they never
lend Money.The sole function of Banker is
>to create and issue credit:
....."
>
>The definition of money at the time would have been
>the equivalent of
M1, I would think. Which makes the
>quote perfectly
correct.
>John R.
>
>
>
> >From: "William B. Ryan" <w_b_ryan@yahoo.com>
>
>Reply-To: socialcredit@elistas.com
> >To: socialcredit@elistas.com,
ownership@cog.kent.edu
> >Subject: [socialcredit] Compound Interest?
> >Date:
Tue, 31 May 2005 07:48:04 -0700 (PDT)
> >
> >[Tim Carpenter, pretending to be
someone who has done
> >his homework] "Wally. I am sure you must also accept
>
>the fact that SC may also be yet another example of a
> >flawed system. SC
does not remove compound interest,
> >which is a far more important issue to deal
with
>IMHO.
> >It appears to advise against personal savings and
> >investment in
favour of bank credit. It creates money
> >to be destroyed yet does not seem to
recognise
> >(judging by
explanations here) it may just be taking
> >the place of money ‘held up’ in the
system which,
>when
> >released, will need to be dealt with (even if that
>
>‘dealing with’ is to do nothing on that occasion)."
>
>---------------------
> >----------------------
> >
> >There is no objective
reality to compound interest,
>as
> >if it could be the cause of an effect. We
may look at
> >some natural phenomenon, such as pond scum spreading
> >across the
surface of a pond, and observe that the
> >surface area of the scum is increasing
as an
> >exponential function of time, and write the function
> >down in a
mathematical formula. The formula is merely
> >the mathematical expression of the
observed growth in
> >surface area. It tells us nothing about
the cause of
> >the phenomenon.
> >
> >Financial contracts, however, are not
descriptions of
> >observed phenomena, but are contracts requiring
> >performance
on the part of the contracting parties,
> >where one party has become indebted to
another for
> >value received. The contracts contain provisions for
> >their
amortization - which is the obverse to growth.
> >The pond-scum metaphor for
interest is utterly
> >fallacious in that non-usurious financial contracts
>
>contemplate the amortization of debt, not its growth.
> >Interest is not the
defining characteristic of usury
> >in the creditary economy.
> >
> >The very
same financial contract may be written in
> >terms of simple or compound
interest, yielding
>exactly
> >the same
result. Or, it may be written without
> >reference to interest whatsoever, with
exactly the
> >same result. What counts is the result that the
> >contracting
parties are committing themselves to.
> >
> >If the contract calls for a rate of
interest of 12%
>on
> >principal compounded annually and payable annually,
> >the
compound rate of interest on the contract, and
>the
> >APR (effective annual
percentage rate) on the
>contract
> >are identically the same--both 12%.
> >
>
>If the contract calls for a rate of interest of
> >11.335% on principal
payable annually but compounded
> >daily, the APR on the contract is again 12%.
>
>
> >Let's say that the explicitly stated interest rate on
> >the contract is
zero, but there are fees or
service
> >charges that have to be paid at the beginning of the
> >contract,
periodically during the term of the
> >contract, or at the end. If you are
required to pay,
> >say, $120 annually in fees on principal of $1000, the
> >APR
is 12%.
> >
> >The false assumption of the money crank--and it is a
> >whopper of
a false assumption indeed--is that the
> >money supply in bank credit is one big
debt that is
> >not being amortized, so that interest accrues to
> >principal and
interest is thereby charged on
>interest.
> > It is failure in logic and common
sense that
> >identifies its expositor as a crank.
> >
> >The empirical reality
is that there are many
> >overlapping loans in the economy as a whole that are
>
>continuously being
amortized. The keyword here is
> >amortize--which means that the principal on
each
> >individual loan is as a statistical matter being
> >reduced. It
translates into a simple rate of interest
> >on the debt for the economy as a
whole that is being
> >charged by the financial sector to the rest of the
>
>economy for services rendered.
> >
> >But if it is observed that debt in the
economy as a
> >whole is itself increasing exponentially in respect
>to
> >the
production of goods and services other than
> >financial services, it will follow
that the interest
> >being collected in absolute terms on that debt is
>
>increasing exponentially in respect to the production
> >of goods and
services other than financial services.
> >
> >The cause of
that exponential increase in debt is
> >explained through A+B when labor
displacement is
> >factored into the equation--the increasing ratio of B
> >to
A.
> >
> >Interest is not the cause of anything, in the same
>way
> >that the
exponential formula describing the behavior
> >of pond scum does not describe the
cause of the
> >behavior of pond scum.
> >-
> >
> >
> >
> >
> >--- Timothy
Carpenter <timbeau_hk@yahoo.co.uk> wrote:
> >
> > > Dear Wally,
> > >
> > > I
shall reply in blue
> > >
> > > On 28/5/05 10:02 am, "Wallace M. Klinck"
> > >
<wmklinck@shaw.ca> wrote:
> > >
> > > > Tim, I insert comments in capital
letters:
> > >
>> ----- Original Message -----
> > > >> From: Timothy Carpenter
> > > <mailto:timbeau_hk@yahoo.co.uk>
> > > >> To: socialcredit@elistas.com
> > > >> Sent: Friday, May 27, 2005 11:56 AM
> > > >> Subject: Re: [socialcredit] debt in nature,
> > > phases, etc. -- Wally
> > > >> comments--again
> > > >>
> > > >> Wally,
> > > >>
> > > >> Ok, if you do not accept the idea of oxygen
>debt,
> > > how about electricity?
> > > >>
> > > >> A battery is ‘charged’ by moving electrons from
> > > one material or place,
> > > >> depleting the matter of its normal quotient,
>into
> > > another. The depleted
area
> > > >> is “+” in the terminology, and the other is “-”
>.
> > > The “+”
can be seen as the
> > > >> debt, where it needs to be repaid somehow,
> > >
somewhere. Nature WILL see it
> > > >> ‘repaid’, by hook or by crook. Those
electrons
> > > WILL be drawn from the
> > > >> ‘earth’, from the air or better
still from the
> > > “-” source. The excess
> > > >> electrons in the “-” will
leak out into it.
>After
> > > all is said and done we are
> > > >> back to zero,
neutral. [WALLY: IN REFERENCE TO
> > > ORTHODOX FINANCE AS IT
> > > >> RELATES TO
INDUSTRY, WE DO NOT ARRIVE AT
>"ZERO".
> > > WE HAVE AN ACCUMULATION OF
> > > >>
UNREPAYABLE
FINANCIAL DEBT, OR DEBT REPAYABLE
> > > ONLY BY MEANS OF CONVERSION TO
> > > >>
MORE DEBT. THE FINANCIAL SYSTEM IN NOT
> > > SELF-LIQUIDATING. WE CANNOT
> > > >>
AUTOMATICALLY CONSUME DYNAMICALLY AS A SOCIETY
> > > THE OUTFLOW OF CONSUMER
GOODS
> > > >> FROM INDUSTRY IN A GIVEN CYCLE. IN NATURE, AS
> > > YOU YOURSELF
SEEM TO INDICATE,
> > > >> THAT CONDITION DOES NOT OBTAIN. HUMAN SOCIETY
> > >
HAS ABSTRACTED ITSELF FROM
> > > >> NATURE IN THIS SENSE. WE AS CONSUMERS
CANNOT
> > > CLAIM FULLY THE OUTPUT OF
> > > >> INDUSTRY WITHOUT FIRST "GETTING A JOB"
(I.E.,
> > > PERFORMING MORE WORK) FIRST,
> > > >> TO "JUSTIFY" CONSUMPTION
THROUGH CONTRIBUTED
> > > EFFORT AND,
SECOND, TO ACQUIRE
> > > >> THE FINANCIAL INCOME TO MAKE IT POSSIBLE. WHEN
>A
>
> > WORM COMES UPON A MORSEL
> > > >> DOES IT FREEZE WITH GUILT, BELIEVING THAT
IT
> > > SHOULD DO SOMETHING ADDITIONAL
> > > >> (I.E., "GET A JOB") TO EARN THE
RIGHT TO
> > > CONSUMPTION OF THE MORSEL? NOT
> > > >> LIKELY! IT IS HUNGRY, HAS
NEED, SEES THE
> > > IMMEDIATE POTENTIAL TO SATISFY THE
> > > >> NEED AND AVAILS
ITSELF OF THE OPPORTUNITY. THE
> > > WORM HAS MORE NORMAL
> > > >> INSTINCTS THAN
THE PERVERTED "MORALITY" OF
>HUMAN
> > > SOCIETY. LABOUR IS ONLY ONE
> > > >>
FACTOR OF PRODUCTION AND AN INCREASINGLY SMALL
> > > ONE AT THAT. SOCIAL CREDIT
>
> > >> AFFIRMS
THAT THE PURPOSE OF PRODUCTION IS
> > > CONSUMPTION--NOT TO CREATE
> > > >>
"WORK"--AND DEMANDS THE RIGHT OF THE CONSUMER
>TO
> > > ACCESS AN INCREASING
PORTION
> > > >> OF THE REAL PROCEEDS OF INDUSTRY IRRESPECTIVE
>OF
> > >
CONTRIBUTED HUMAN EFFORT.]
> > > >>
> > > >> Now you are moving from debt to a
wider
>context,
> > > Wally. This began with
> > > >> people saying debt in
itself as a basic concept
> > > is not found in nature AT
> > > >> ALL, which I
disagree with and I have shown an
> > > example of debt in the form of
> > > >>
an artificially created Œlack¹ being repaid in
> > > nature. The argument of no
>
> > >> debt in nature seems to
be a means of laying
>the
> > > ground to justify debt-free
> > > >> issuance.
In the context of a growing economy
>the
> > > SC mechanism might well be
> > >
>> the justified, but we need to avoid the
> > > apologists for unjustified DF,
which
> > > >> can muddy the SC cause (in my view).
> > > >>
> > > >> Compound
interest, however, is not found in
> > > nature and I do not dispute this.
> > >
>> Surely as a first step, THIS needs to be dealt
> > > with, THEN analyse the
>
> > >> behaviour of the economy...
> > > >>
> > > >> You return to the worm
example. This is such a
> > > distorted example as I have
> > > >> said before.
I do not pay for air just as the
> > > worm does not pay for the
> > > >>
morsel. No one has a claim on the morsel.
> > > HOWEVER, if a bee makes honey,
does
> > > >> that permit the bear to take it? Does the bee
> > > happily allow a
raid? No, the
> > > >> bee gives it¹s life to protect what the bear
> > >
considers a Œmorsel¹. The bee
> > > >> has collected and created the honey and
pollen
>as
> > > the fruits of its labour,
> > > >> freely given to it in
exchange for the task of
> > > pollination. The bear still
> > > >> has no guilt,
but actually it might consider
>it,
> > > for African tribesmen have
> > > >>
guilt and give thanks to the bees, only
taking
>a
> > > proportion. The bear raids
> > > >> without compassion, guilt or
respect,
>destroying
> > > all it sees if it has the
> > > >> whim. The bear acts
like modern industrial man
> > > who wants to consume all with
> > > >> no cost,
impact to itself or consideration of
> > > others.
> > > >>
> > > >> Guilt,
consequence, respect is part of what
>makes
> > > us above animals. We are
> > >
>> too powerful as a species NOT to have such
> > > limitations on our
capabilities
> > > >> and desires until we attain
> > > Godhead/Enlightenment.
>
> > >>
> > > >> I would also mention that Œlabour¹ is too crude
>a
>
> > term these days. Your empty
> > > >> factory floor has taken decades of human effort
> > > to achieve. Machines and
> > > >> technology takes effort Œoff camera¹ and
>instead
> > > of distributing goods for
> > > >> free, lowers the unit price without a discount.
> > > >>
> > > >> Even if this does not satisfy you, I am afraid
> > > that your underlying point
> > > >> does not move me. I am not at all convinced
>about
> > > Grace being universal and
> > > >> for all things at all times - it may be here
>and
> > > there, but is no done deal
> > > >> in my view. [WALLY: SOCIAL CREDIT IS A POLICY
> > > OF A PHILOSOPY, THE LATTER
> > >
>> BEING CHRISTIAN. IF WE ASSUME THAT THIS
> > > PHILOSOPHY IS ESSENTIAL REALISM
> > > >> ANYONE CAN, OF COURSE, ACCEPT IT IF THEY
>POSSESS
> > > THE UNDERSTANDING AND WILL
> > > >> TO DO SO AND SO CHOOSE. FROM A PHILOSOPHICAL
> > > POINT OF VIEW, AS THIS RELATES
> > > >> TO THE OPERATION OF OUR FINANCIAL SYSTEM IN
> > > RELATION TO THE PRODUCTION
> > > >> SYSTEM, WE DEMAND AN INCARNATION OF THE
>DOCTRINE
> > > OF UNEARNED GRACE IN THE
> > > >> PRICE SYSTEM IN ORDER TO FACILITATE
>DISTRIBUTION
> > > OF CONSUMER PRODUCTION TO
> > > >> ALL MEMBERS OF SOCIETY ACCORDING WITH THE
> > > IMPERATIVE OF UNCONDITIONAL
> > > >> UNIVERSAL INHERITANCE. THIS WE JUSTIFY BY
WHAT
> > > WE REFER TO AS THE UNEARNED
> > > >> INCREMENT OF ASSOCIATION AND THE
CULTURAL
> > > HERITAGE.]
> > > >>
> > > >> Wally, I certainly do not assume it
to be
> > > Œessential realism¹, and think the
> > > >> term as misleading and
presumptive, just as I
> > > consider the term Œprogressive
> > > >> taxation¹ a
misnomer to somehow give a
>positive,
> > > Œright¹ and justified gloss
> > > >>
on what is envy. I also challenge it as being
> > > truly Christian ­ it
appears to
> > > >> be based on the inventions of St Paul, not
>Jesus.
> > > You
are free to believe
> > > >> what you will, but you are not free to decree
> > >
that the financial system must
> > > >> operate according to your personal
religious
> > > beliefs or faith. Imagine how
> > > >> you would feel if Sharia
were imposed? I think
> > > you would object to that, but
> > > >> those who
believe in it have a similar feeling
>of
> > > right and justification in
> > >
>> God¹s eyes.
> > > >>
> > > >> We may have to stop here as you clearly have a
>
> > religious or philosophical
> > > >> basis for your view which I can be
forgiven for
> > > assuming that you will not
> > > >> entertain ANY alteration.
This renders you
> > > incapable of discussing this, only
> > > >> stating your
views (by this I mean you will
not
> > > entertain changing your
> > > >> mind). [WALLY: I THINK THAT THIS IS A
RATHER
> > > PREMATURE ASSUMPTION ON YOUR
> > > >> PART, TIM. I HAVE NOT JUST
BEEN SITTING AROUND
> > > WITH AN INTERNALIZED FIXATION
> > > >> FOR MORE THAN
HALF A CENTURY WITHOUT REGARD TO
> > > THE EXTERNALITIES AROUND ME.
> > > >> AS
INDICATED ABOVE, I CERTAINLY DO HAVE A
> > > PHILOSOPHICAL
> >=== message
truncated ===
> >
> >
>
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