Subject:  Re: [socialcredit] Re: Question for Anielski, Kjellberg, Almgren et al.  Date:  Friday, October 22, 2004 09:29:31 (+0200)  From:  Per Almgren <info @........se>

In reply to:  Message 270 (written by Swieto Radosci) 
At 21:59 20041021, you wrote:
Bill Ryan wrote:
 The assertion that interest is an "exponential
 driver" is absolutely farcical. It is a mathematical
 formula and nothing else that may or may not be
 applicable to a specific process. A mathematical
 formula does not "drive" anything.
Why not when it drives? It makes
difference what matamatical formula you use to forecast future. Is it
exponential formula (compound interest), multiplication (simple interest)
or adding (fee)?
It makes real difference in the speed of that
"drive" you mentioned. All corporational and governmental
institutions forecast future on the basis of exponential growth, and not
on slower formulas. Therefore we must drive faster and faster...
 It is ridiculous
 to speak of its "effects." Moreover, the term
 "compounding interest" as it applies in contracts is
 utterly meaningless without knowing the period of
 compounding. With pond scum it is something we
 determine through observation. With contracts it is
 determined through agreement between the parties, and
 can be anything at all the parties agree to.
 Whatever the period of compounding might be as stated
 in the contract, the underlying debt does not
 compound unless interest is not paid when due and
 therefore accrues to principal. Whatever the
 contracted rate and compounding period and payment
 schedule it is translatable into the terms of
 annualized simple interest. So the simple interest
 formula is just as applicable to the contractual
 process as is the compound interest formula. Basic
 math.
The possibility for the contractor
part to pay the agreed interest is depending on other companies or
peoples willingness to borrow more money, i.e. increasing their total
debt, as long as the interest charged is not completely used for
purchasing goods and services. If the new (increased) lending occurs the
debt will rise exponentially together with the yearly interest costs. If
new (increased) lending doesn't occur, the result will be less purchasing
of goods and services and increasing rate of unemplyoment.
The new lending can of course be to the government that uses a deficit in
the budget to pour out more (needed) money into the economy. If this
lending comes from a governmentally owned central bank, as was the case
in Sweden more than 10 years ago, it would in fact be interestfree since
the profit of the central bank was handed over to the government. Now
when Sweden has become a member of the European Union, this is no longer
possible (actually forbidden by the EU treaty).
If people are just hoarding cash money instead of buying, this will also
require new lending, but less since the hoarded money doesn't call for
interest payments.
Per Almgren
Yes,
basic, but most sophisticated math says as something about financial
imperatives of compounded growth included in all prognosis made by
corporations. Corporations and careers of top managers are built on
compound growth, yearly checked by governments and owners. If not growing
exponentially, corporations are dying because capital is withdrawn from
them.
cheers
Kristof Levandovski

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