| Subject: | Re: [socialcredit] Extrapolating A+B Part 1 | | Date: | , September 22, 2005 11:09:26 (+0200) | | From: | cymric <cymric @.......nz>
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| In reply to: | Message 2849 (written by Joe Thomson) |
There are three quotes I will make from Joe's post in response to my comments.
(1) "The banker doesnt lend money for you to pay interest, he lends money for
purposes of ongoing production"
(2) "So where does interest come from then, unless the 'debt'; is constantly
made larger? We know he makes many loans and they overlap one another"
(3) "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.?"
Peter's reply:
(1) I dont know how you thought Joe I meant for the borrower to approach the
bank for a loan to cover the interest which in turn would demand its own
interest and then a third loan requested for that and on and on etc. I can see
why its isnt 'credible'.
Obviously the interest is taken out of cirulation of the subsequent money supply
loaned for productive and or consumptive reasons etc. Which then increases
demand for new loans exponentially over time as the dynamic I referred to
continues - future incomes ( and loans/debt)to pay off past production. I
pointed to this dynamic as evidence that the system cannot be self balancing as
William indicates for this to be happening. This is the equivalent to saying
there is no 'gap' ( A plus B ) as an uncle of mine used to say because the banks
lend into the gap!
This game of catch up by the ever increasing debt and to pay the interest is
what drives the extra production ( now starting to consume the planets resources)
just to pay off the previous productive cycles and sustain the banking game.
The extent that debt money is syphoned off in the following cycle to pay
interest on previous cycles means that much less invested in production etc,
which is why we get into the perpetual catch-up mode.
(2) This is where we get the interest- from the debt money in circulation
through loans, ever increasing money supply. As the late Prof John Hotson (
Ontario-Canadian) said the ever expanding money supply can be likened to an
aircaft in flight, the air speed being determined by the demand to cancelled debt
and pay the interest.
If the aircraft ever slows ( the expansion below demand) the aircraft falls
short of the minimum airspeed to keep it in the air and thus it will crash.
So we are both agreed on this in measure but your explanation of how fractional
reserve banking works defies the text books. That 100 dollars loaned is entered
into the customers account in the banks records on one side of the account. As
he pays of the loans, each installment is entered on the opposite side of his
account thus showing a deminishing balance oustanding until that original $100 is
cancelled. Banks dont relend cancelled figures on paper,( there is no interest
to be gained on ZERO) they create new ones. So the extent and growth of debt is
far greater ( exponentially in fact ) contrary to your expanation of fractional
reserve banking accounting system. Every day they create and cancel money and
obviously the rate of creation will be higher than that of cancellation if they
want to get the interest on their loans.
This is why Douglas pointed out that the economy isnt driven by demand but by
banking policy hence the over production beyond the consumers demand and the need
to export and find markets. The debt loads are so great they have to get the
national barriers down ( open markets) to satisfy the debt bemands, not to feed
the starving billions.
(3) I can not understand how anyone is supposed to see these two dividends (
Banks D and S.C Nat. Div ) as being the equivalent by different means. Firstly
the National dividend in volumn may or may not be equal to the dividens released
to very few people in society. I would expect that a regular National Dividend
would far exceed that of the annual dividend of the banks. I can see there would
be a huge difference between everyone getting a bank dividend for the
social-economy rather than just a few, who may invest it overseas today anyway.
This is why I said to William, I see he matches words ( eg 'dividends' and
'dividens') but I am waiting to see the values being equal. I would appreciate
someone showing me how these two dividends can be equal. I dont recall Douglas
indicating they were, but certainly he made it clear that the banking industry
was not beyond making positive contribution by dispersing debt free money into
the economy ( dividends and interest on deposits).
This is a good subject and I expect we are all or most of us have a bit to learn
or at least clarify here. William appears to have some ace up his sleeve and I
cant wait to see what it is.
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