| Subject: | RE: [socialcredit] Compound Interest? | | Date: | Wednesday, June 1, 2005 06:56:09 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
| In reply to: | Message 1615 (written by John G Rawson) |
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.
----------------------
-----------------------
What's wrong with the definition that Douglas actually
used?
--- John G Rawson <johngrawson@hotmail.com> wrote:
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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