As I said, the volume of it is the equivalent of M1. I didn't invent these
terms and they didn't exist in his time. But they are ones that get thrown at
us, and we have to deal with them.
Regards. 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:
Wed, 1 Jun 2005 06:56:09 -0700 (PDT)
>
>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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