| Subject: | [socialcredit] Re: [ijccr] Re: Extrapolating A+B Part 1 | | Date: | Wednesday, September 21, 2005 12:51:55 (+0200) | | From: | Leonardo Wild <dlwild @.........net>
|
Mr. Ryan,
A little note on the fallacy of using fallacious analogies:
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> The fallacious "pond scum" analogy:
> (...)
> Scum spreading across a pond is a natural process that
> may appropriately be described as e_p_o_n_e_n_t_i_a_l.
> It is a process that cannot be described in terms
> that are other than exponential.
The problem is that ponds don't interconnect in a way that scum can,
scum-like, skim from one to the other. A pond is "the known world" and
when scum grows it encroaches until it reaches the boundaries of the
"known world." Claiming that scum will not encroach to other ponds and
that therefore this is a perfect example of why individual bank
accounts from individual entities (people, companies, corporations,
nation-states) have no bearing upon the total economy is ludicrous at
best. A local economy is like a pond where the financial system
encroaches until it has reached the limits of the local economy. This
is why so-called "globalization" needs "open markets" ... open markets
for money to move freely. If that isn't done, the local economies will
we swamped by the growth of money taking over the growth of productive
economy; the two are not the same yet financial (non-productive)
economy affects the other since money, as seen by the financial market,
is one more commodity to sell and buy.
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> (...)
> While it is true that spread of scum across the
> surface of a pond is exponential, it is not
> necessarily true that pond scum in the aggregate
> spreads exponentially; for we have to take into
> account scum that has reached the limits of its pond,
> the statistical average of ponds forming and depleting
> with seasonal weather variations, the total surface
> area of ponds in the world amenable to scum, etc.
Nature isolates living systems, or they are naturally isolated by their
inherent characteristics. Scum will not become weeds will not become
cockroaches will not become trees. When something in nature reaches the
boundaries of growth it levels out. When it has depleted the elements
it needs to continue surviving, it will die off until a balance has
been found. With money there are no such boundaries, or scarcely so. As
you say, it depends on the contract. If the contract says that funds
can move freely, funds will move there where they will become more due
to their being a merchandise that can "become more" due to interest
rates. This is the whole move towards "free market."
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> It
> is probably true that the total surface area of
> actually existing pond scum in the world today is
> about the same as it was ten thousand years ago. The
> same with mice, rats, and cockroaches.
I doubt it but I don't have prove of it. This point, however, seems to
be an unfounded supposition. Are the trees in the world, or even the
forest, of the same extension? No. Have the deserts grown? Yes. Has
pollution reached into almost all corners of the world? Yes. Therefore
most of the bugs and animals will NOT be equally existent today as they
were before. In fact, about 4 species are dying off per hour. Your
example shows a preference towards animals that are considered a
"pest."
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
>
> So, the spread of pond scum in the world, as opposed
> to the spread of scum across the surface of an
> isolated pond, is n_o_t an exponential process.
Because a) ponds are isolated, b) a pond is a pond is a pond but each
has inherent qualities where certain growth will NOT happen, c) nature
has a way of self-preservation and balancing processes that get out of
hand, d) because of all of the above scum cannot acquire a certain
synergy (which is more than the sum of its parts) that will enable it
to encroach of all forms of pond, where in Great Britain or in the
Sahara, and so on and so forth. If you are using examples taken from
ecology and biology, please do make an effort to get THOSE facts right.
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
>
> The m_a_c_r_o perspective is something quite different
> than the m_i_c_r_o perspective.
Finally some sense. Exactly. Therefore you cannot say that because it
works like this in the micro perspective (INDIVIDUAL BANK ACCOUNTS,
whether positive or negative), that therefore it has no bearing on the
macro. Monetary flow is a chaordic system that will encroach until the
known universe of its existence has been duly taken over. As a chaordic
system, the sum of its parts work synergetically. Analyzing each bank
account and saying ... "Oh, but the pond ends here therefore it has no
bearing on the rest of individual bank accounts," is a fallacy taken
from a biological medium while disregarding certain biological facts
and processes ... quite a neo-economist's partitioned view of the known
world. Pollution doesn't have a bearing on such species of economists
because it doesn't add up mathematically in the spread-sheets (there
have been no particularly monetized values for the cost,
loss-created-by, etc. of pollution).
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> But, again, the "compound interest formula" describes
> a particular form of a contract, not a process.
A contract yes, but one which, the moment the flow starts, it becomes a
mathematical process applied to the real world.
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> Debt
> can be repudiated, defaulted or amortized; whereas
> pond scum exists or it doesn't.
Can it, really? And what happens when that happens? Nothing? Tear up
the contract and everyone will be happy? You forget about politics,
Willy. Third World Debt amounts to only about 6 percent of total debt.
Nations must pay it off not in money but in resources. Where they to
repudiate the debt, military intervention or economic boycott ensues.
Where they to default, and lets say the banks readily agree, it simply
means that a chain effect occurs were the resources simply stop
arriving. In 30 years the Third World has paid the equivalent of 50
times the amount paid to reconstruct Europe after the Second World War
... and it wasn't paid in local currencies. The debt is being paid in
resources. This means that the receiving parties (as interests are
"capitals" are being paid back) have had enough to reconstruct the
First World 1.6 times per year. If there had been no wars, no natural
catastrophes, no "accumulation of wealth" by a few, how well off and
happy would be the people in the First World? Had there been an
economic system of production of goods that last, rather than end up as
garbage in massive dumps, how much of those resources would still be in
use? Just questions that are left open, not accusations to anyone nor
anybody. This is a "process" that is hidden behind each contract. It
exists, but as opposed to pond scum, it spreads where the money
spreads.
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
>
> In the rudimentary macroeconomic model of Firms, Banks
> and Consumers, banks pay interest on positive account
> balances, and collect interest on negative balances.
> The differential is the gross profit of the banks.
Considering that banks do NOT make new money, which I presume you
claim. I know you have a thing with Turmel and have now decided to
extend your favors to others on this list. That's your thing. It
appears that you get on Turmel's case on various lists and now you
have, for some reason or other, decided to pay us at IJCCR a visit and
repudiate, with utmost care in making it clear that your preference
seems to be personal attacks. That's your thing once again. That seems
to be the extent of your ability to provoke reactions, perhaps as an
analysis of who is who in the Most Wanted list of, as you call them,
"haters." Do consider the following, though. On Page 18 of a booklet
WHAT IS MONEY REALLY ABOUT?published by the Swiss National Bank
(Copyright 2002), copies can be ordered at sss.snb.ch and are available
in English, German, French and Italian, an explanatory text STATES THE
FOLLOWING:
"How banks increased the supply of money":
"The banks can increase the amount of money in circulation. This is how
they do it: suppose a customer pays 20,000 Swiss francs into his
account. The bank can give this money to another customer ini the form
of a loan. To be on the safe side, it will keep back a portion, say
4,000 Swiss francs, as a reserve, in case the first customer wants to
withdraw some of his money from his account after a short period. The
second customer, a businessman, needs money for new computers. He
obtains a loan of 16,000 Swiss francs from the bank. The credit balance
on the first customer's account has not be reduced. It still stands at
20,000 Swiss francs. But the overall quantity of money that is
available has increased by the 16,000 Swiss francs now in the hands of
the businessman. This is how banks can increase the money supply of the
money to the economy. The National Bank influences the actual amount of
money the banks can create by granting the banks more or less credit.
Banks can create money by holding a portion of the money paid in by
customers in reserve while handing out the rest as loans."
One other fact is that MONEY CREATED is money that earns interest. If I
earned money from my work, the money given to me was NOT created by the
person who paid me for my work. But if you follow the chain to the
SOURCE OF MONEY CREATION, then money that is in circulation is earning
interest and the final consumer (when I SPEND the money I earned) is in
fact paying the interest added into the goods through the chain of
CREATION OF GOODS as the individuals, companies, etc. have included in
the price of the goods or services not only the COST of production but
the COST OF MONEY -interest rates- whenever applicable. If you wish to
compare money to the scum of your example (strange thing you've chosen
to compare it to), then the pond is NOT an individual bank account, but
rather the known world where that money is able to flow. The more
borders are opened through so-called "free trade agreements," the more
of the known world this system can expand and encroach.
One fact that might have eluded you, Mr. Ryan (I don't know why, but
your attitude and words remind me of the agent in The Matrix), is that
if a bank gives out a loan taken from the example above, they do it by
asking some "security" from the proverbial businessman. They "hold" the
businessman's property (maybe even the computers he's decided to
purchase) "for ransom" through a "contract." That's not only their
warranty that in case he defaults they will get some value back, but in
fact is the "monetization" of those computers or goods or property.
Great for the bank. They have "secured" the value of the loan through a
legal contract. They have "GIVEN the money loaned a VALUE". But this
means that the businessman must now work to cover that value (i.e.,
earn money to the amount borrowed PLUS the interest to be paid on it)
in order to "release" his property. If something happens, say he
defaults, the banks will take back the property in their legal hold and
the businessman will have neither the money nor the property. The sad
thing here is that the bank DID NOT HAVE that money in the first place.
They CLAIM that it stems from the deposit (the first 20,000 Swiss
francs), but as you read, they CREATED NEW MONEY based on the warranty
delivered by the businessman, and they DESTROY THAT NEW MONEY when he
"pays back" the borrowed amount, but KEEP THE INTEREST.
This is the pond and if the businessman waits too long to pay back, the
growth of money can encroach to the point where no matter how hard the
businessman works, he will not be able to pay off the loan (let's say
the computer business didn't work as planned) and he will be "eaten" by
the scum in his pond. Isolated, this process based on a contract will
not give you a reason to suspect that the problem can spread beyond the
businessman's pond. But ... what did the businessman do with the 16,000
Swiss francs? He PAID them in exchange for computers. What did the
computer company do with that money? If they already had their expenses
paid through other sales, they DEPOSITED that money in the bank, maybe
the same, maybe another.
That DEPOSIT of 16,000, at a similar 20 percent (to be kept as a
reserve; see example of 20,000 in vs newly-created 16,000, since the
20,000 were kept in the depositor's account), makes you suddenly wonder
what the bank that has received the 16,000 can do with that DEPOSIT. If
their business is to make money from money, they will probably keep 20
percent (which amounts to 3,200 Swiss francs), keep an account of
deposit of 16,000, and lend out NEWLY CREATED MONEY to the extent of
12,800 Swiss francs from which they will keep the interest.
There are countries where the reserve (also known as fractional reserve
banking) is less than stated in the example, that is, 10 percent or
even less, meaning that they can create much more new money.
Synergy, Mr. Ryan, synergy: 1 triangle AND 1 triangle doesn't result in
2 triangles but in 4 triangles; take a look at the work of Buckminster
Fuller to see what I mean.
The economic pond called "money market place" is not made up of
isolated, quaint, English-garden ponds. Nor will you notice much
"exponential growth" going on in the market place if the time-frame of
your study is as limited as your proverbial isolated pond or series of
ponds that have no connection with each other.
If you take each individual account and study its "growth" on a short
time-span, or the time-span it takes to pay back a given loan, you will
not see the effect of all those accounts working together over a larger
time span. If you take a contract (which is immersed in a legal pond)
and claim that it's not a process because it's only a piece of paper,
then you have forgotten some data that might brighten your day where
you to add to that legal pond the pond of economic production happening
in a limited physical space, plus the pond of political interests. The
three together -Politics, Economy, Judicial system- create a synergy
where the processes take place that may help you understand better the
inner workings at the micro level, plus the synergetical workings at
the macro level of putting all of it together and, rather than using
the plus (+) sign to make your calculations, realize that there are
things greater than the scum you repeatedly took as an example of why
money isn't ... scum. In this regard, I agree fully. Money did not grow
in ponds (isolated or otherwise, whether British nor American nor
German), it did not fall from the sky (or heaven, if you wish), it's a
human creation that has spread, un-pond-like, throughout our pond-like
planet as seen from afar, from very far.
Do notice, please, that I have not stated whether such a system is good
or bad, whether such a process based on debt contracts (to be found in
the legal pond) is evil or holy, nor that it is isolated (pond-like) to
the United States of America, Europe, Japan, Timbaktu, England, or any
particular geo-political location but, rather, that it's a system that
has encroached over the past five hundred years to make the pond (alias
"known world") the entire planet Earth, the third planet in this our
Solar System which happens to be on the outskirts of the Milky Way
Galaxy.
Have a pond-like day.
Regards,
Leonardo
On Sep 21, 2005, at 5:13 PM, William B. Ryan wrote:
> There are consumers and firms who individually have
> positive or negative balances with banks.
>
> The positive account balance of the firm or consumer
> who spends his income as he receives it, from all
> sources, interest or otherwise, will not compound.
>
> The negative account balance of the firm or consumer
> who services (or amortizes) his debt according to the
> terms of his contract will not compound.
>
> Then, please explain why interest as a mechanism of
> trade and commerce should cause debt in the economy as
> a whole to compound?
>
> By that I mean interest being e_x_p_e_n_s_e_d to the
> point of retail by firms in respect to the income of
> final consumers.
|
Re: [ijccr] Re: Ex
Reply to this message