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Quite correct. I am not sure why there should
be so much confusion. A pawnbroker does not take possession in the form of an
owner unless the borrower renegues or defaults. Neither does a bank. Neither the
pawnbroker or the bank increase their "assets" by virtue of the collateral. The
collateral "may" become an asset in the case of a default but the real asset in
the case of the bank is the loan which has been offset by the credit
extended.
Assets other than money are not money but may be
converted into money by means of a transfer from one party to another for money
which is already in existence.
The essential thing to be understood is that the
word "money" can be misleading. Currency, in the form of notes and coins is
money. Credit offered by a trader is not and cannot become money it is simply a
time transfer arrangement but is simply the same as a point of sale transfer of
goods for money.
Credit provided by a banker to a borrower is not
money until it is drawn upon. When it is drawn upon it becomes money and effects
a transfer either within one bank or from another bank. It is simply bookkeeping
but nevertheless is accepted as money because people are prepared to accept
cheques (orders to pay) as money. The bookkeeping entry I.e. an increase in one
person's account and a decrease in another person's account is a separate matter
from the process of providing credit by a bank. It is not a matter of the
relationship between the collateral offered and the credit provided but a
relationship between the credit provided and legal requirement related to "cash"
reserves, now referred to as "Prime Assets" or the "Capital Adequacy
Ratio".
Irrespective of what is taken as Prime Assets of
Capital Assets of the bank, the fact is that they create money through the
lending process and in doing so claim ownership to the real basis of the money
(credit) which they create. That basis is the real credit which is in fact, or
should be recognized as the nation's credit with the ownership residing with the
people and not the banks.
Vic Bridger
----- Original Message -----
Sent: Sunday, November 21, 2004 3:35
AM
Subject: Re: [socialcredit] the reality?
-- the true assets of banks
That is apart from the fact they have virtual
ownership -- they can
take possession -- of bonded
properties (and cars etc.) against which
credit has
been granted to
borrowers?
--------------------------------
------------------------------
In
a chattel mortgage, like from a pawnshop, the
lender takes physical
possession of the collateral
during the term of the loan but not
beneficial
ownership, which he gains only if the borrower
defaults. The specific property law in the
particular
jurisdiction governs the matter. In a
collateralized loan like a
home mortgage, in most
jurisdictions (deriving from English common law),
the
borrower maintains titular and beneficial ownership
of the
collateral during the term of amortization.
The lender gains neither
beneficial nor titular
ownership if the borrower defaults and the lender
forecloses. The property must be sold at public
auction.
I think you're getting at the virtual ownership of
the public's
credit. The bankers think they have
that ownership and the
deregulatory environment and
prevailing ideology let them get away with
it. It is
our job to disabuse them of that notion. The bankers
should be informed they are servants of the public,
not their
masters. We do that appropriately through
regulation, not
usurpation.
->
Jessop Sutton <sutton@kingsley.co.za>
wrote:
On
Wednesday 17 Nov 2004 7:47 pm, william_b_ryan@yahoo.com wrote:
> "But
the essential point in the position of banks,
> which is so hard to
explain, and which is grasped by
> so very few people, is that their
true assets are not
> represented by anything actual at all, but
are
> represented by the difference between a society
>
functioning under centralised and restricted credit
> and a free
society unfettered by financial
>
restrictions.
======================
I haven't looked at a bank's
Balnce sheet, but is it not true that the banks
are as heavily invested
in buildings and property -- all rentable space -- as
are the Insurance
companies? Are these not also their "true assets"?
That is apart from
the fact they have virtual ownership -- they can take
possession -- of
bonded properties (and cars etc.) against which credit has
been granted
to borrowers?
But, yes -- "the difference between a society
functioning under centralised
and restricted credit and a free society
unfettered by financial
restrictions", I suppose does sum up the end
result of all the credit-based
activity.
Jessop.
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