| Subject: | Re: [socialcredit] Extrapolating A+B Part 1 | | Date: | Wednesday, September 21, 2005 13:18:15 (-0700) | | From: | Joe Thomson <thomsonhiyu @....ca>
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| In reply to: | Message 2846 (written by cymric) |
(Peter Haines wrote:-)> We seem to be developing a house of mirrors.
> The question asked for a LOGICAL reason/explanation.
> Two responded saying the interest has to be borrowed and two responses to
that have been:
> 1, a mere 'ascertion'( or a similar word if my memory has failed me)
which is nothing to do with not being logical.
> 2, not 'credible', which also doesnt say why the answer offered wasnt
logical.
(Joe replies:-) Since number 2. response above was mine, let me ask you,
Peter, have you ever gone back to your banker and borrowed the 'interest' so
you could repay the loan contract you entered into in full? The one where
the same banker only created the principle? What do you think your banker's
reaction would be if you asked for such a loan? Yet when you borrow money,
and repay it as per your loan agreement, the interest obviously has to come
from somewhere. And it does. The banker doesn't lend money for you to pay
the interest, he lends money for purposes of ongoing production. To do
otherwise would be tantamouint to having a 'financial system' not backed up
by an 'industrial system' ~ something Douglas has told us is an
impossibility.
So where does the interest come from then, unless 'debt' is constantly made
larger? We know he makes many loans, and they overlap one another.
Consider this, an overly simple example, I know, but it might help to
illustrate what goes on. A bank makes a loan on Jan. 2, 2005, for $100,
repayable in full in one year, at 10% interest. $110 will have to be paid
back for the $ 100 lent. On July 2, 2005, the bank makes another loan, same
terms, repayable in the amount of $ 110 one year hence. Now there's $ 200
in existence as 'debt'. And $ 220 that must be repaid. Lets say this is the
only $ 200 in existence.
On Jan.2, 2006, loan number one is repaid in full. And the banker, being a
banker, relends the same $ 100 for another year on the same terms. There is
still $ 200 in debt in total in existence. Same as before. But there is
also $ 10 in 'debt-free' money in existence, too. The banker's 'interest'.
Which, like all other money, has no value of itself, only for what it will
buy. On July 2, 2006, another $ 110 is due, and is paid, and the same $ 100
is again relent. Now the banker has taken his $ 10 in interest each time,
but after doing so and relending the principle has overall debt increased?
It has not. There was $ 200 in debt to begin with, and $ 200 in debt still
exists, and the 'interest' hasn't caused that debt to increase one iota, nor
can it, so long as the banker relends what was repaid, and the contract
agreed upon is honoured by the borrower. So much for the 'interest' as the
big problem argument.
You might note that there is, after this second loan repayment $ 20 in
'debt-free' money now in existence besides the $ 200 in 'debt'. Do you not
see the similarity between the 'bank dividend', if this money were paid out
as such by the bank, and the National dividend?
>
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