| Subject: | [socialcredit] Re: Jessop's question restated | | Date: | Wednesday, June 1, 2005 08:15:20 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
| In reply to: | Message 1614 (written by Jessop Sutton) |
Jessop, I've answered your question on several
occasions--it is predicated on a false premise. I'm
willing to work with you until you get it--as long as
it will take. To repeat--the mechanics of the process
are simply not as you describe:-
[Sutton] "Now we introduce movement, and advance from
the standstill position: The National Credit Authority
instructs the Reserve bank to establish a credit
balance in my account at my bank without at the same
time 'creating' new cash to support the new credit in
the system. The rule is violated: the economy is out
of balance."
------------------
-------------------
The Credit Account administration writes a check to
you drawn against its account at the reserve bank,
which you deposit in your bank. (It is a tabulation
rather than a checking account in the ordinary sense,
for its balance is irrelevant.)
Your bank credits your personal account in the face
amount of the check. Your bank deposits the check,
which you have endorsed, into its account at the
reserve bank.
The reserve bank credits the like amount to your
bank's reserve account without debiting any other bank
(as would have been the case if the check had been
drawn on some other bank) but rather, an equal debit
notation is entered into the tabulation of the credit
administration's account.
Everything balances as a matter of accounting.
The single difference from current practice is that
the reserve bank debits the National Credit Account
tabulation rather than its internal securities
purchasing account tabulation.
You as citizen get the check representing the new
money rather than you as securities dealer. Other
than that, the mechanics of the process are exactly
the same.
In either case, interbank reserves and customer
deposits are increased in like amount when the check
clears. The ratio of interbank reserves to deposit
liabilities is thereby increased, not decreased by the
transaction--the exact opposite of what you presumed.
-
--- Jessop Sutton <sutton@kingsley.co.za> wrote:
> I previously wrote: "I will come back later with a
> clearer question (if I can make it any clearer)."
> Jessop.
> ==========================
>
> I will try again. If I don't succeed this time, it
> will be time for me to give
> up completely.
>
> Let's stop the clock and take a look at the
> 'stanstill position' of an
> economy. There is an amount of 'money' in the system
> consisting predominantly
> in credit but supported by an amount of cash in a
> defined ratio. Every bit of
> the 'money' is owned by someone -- some person, some
> business, some entity,
> including the 'people' administered through the
> governement. Tim Knight has
> been trying to tell us this for some months. There
> is no free money in the
> system. When credit is passed from one entity to
> another, an adjustment is
> made at the central bank between banks' reserve
> accounts to reflect the
> change. If money is temporarily taken out of the
> system, the new possessor of
> the bank notes has pieces of paper which are bearer
> cheques drawn on the
> Reserve Bank -- "I promise to pay the bearer on
> demand at Pretoria Five Rand"
> (I still have in my possession and old R5 note with
> that inscription). [see
> Note below]
>
> Forgetting for the moment about the way the money in
> the system increases (we
> are looking at a standstill position), as ownership
> passes from one ownership
> to another, credit is cancelled in one place and
> established in another. It
> is kept in balance.
>
> Now we introduce movement, and advance from the
> standstill position: The
> National Credit Authority instructs the Reserve bank
> to establish a credit
> balance in my account at my bank without at the same
> time 'creating' new cash
> to support the new credit in the system. The rule is
> violated: the economy is
> out of balance.
>
> If we can admit that there is a problem, we could
> then start to discuss
> possible ways past it in a Social Credit economy. I
> have suggested previously
> that to print new notes for the Reserve Bank to hold
> in the NCA's account may
> be possible, but it does violate the manner in which
> the volume of 'money'
> available in the system is normally allowed to grow
> and could have
> undesirable consequences.
>
> Another possibility is that all pretence at a legal
> reserve requirement be
> abolished, but that could send an economy out of
> control. New Zealanders on
> this forum say that NZ has done away with the legal
> reserve. Perhaps if they
> could explain exactly how their banking sytem now
> works in the conomy, it
> would give us (at least me) something to work on. At
> the moment I have little
> hope.
>
> Bill, now I confess that I do not understand your
> explanation given in your
> reply of 28/05/2005: - "The central bank is the
> central bank, Jessop. It is
> concert master to the orchestra. The $1000 doesn't
> come from anywhere when
> the central bank creates it ex nihilo. It is a
> credit applied through
> bookkeeping entry to the depositing bank's account
> when the central bank's
> check clears. Inasmuch as the check was drawn
> against the central bank
> itself, the credit is not debited against any other
> bank in the system."
> Maybe this does give the answer to my question, but
> I don't see it. Without
> the introduction of additional new bank notes to
> maintain a relationship
> between credits and backing-cash in the available
> 'money' supply, the problem
> remains exactly as I outline it above. Can you show
> me differently?
>
> Kind regards to all,
>
> Jessop.
> =====================
> [Note] I still have in my possession an old Reserve
> Bank note with a nominal
> value of R5. It is inscribed above the signature ot
> the Goverenor of the
> Reserve Bank: "I promise to pay the bearer on demand
> at Pretoria Five Rand".
> This was later ommitted from bank notes because it
> became meaningless in the
> sense that if I did go there, they could only give
> me another bank note to
> the same value in exchange. I might just as well
> keep the R5 note that I
> have. The "I promise to pay ..." clause was valid in
> the days when we still
> had the gold standard when gold to the value of the
> note would have been
> expected -- not that many people made any use of
> that facility just before
> the end of the gold standard in our country which I
> vaguely remember was
> either just before or just after the Second World
> War. I remember grown-ups at
> the time speaking about it.
>
>
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