| Subject: | [socialcredit] Re: Extrapolating A+B Part 1 | | Date: | Thursday, September 22, 2005 16:53:18 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
"Obviously the interest is taken out of circulation of
the subsequent money supply loaned for productive and
or consumptive reasons etc..."
-----------------------------------
Nothing is taken out of circulation to pay interest,
either subsequently or concurrently.
Think in terms that all the money in circulation
arises from bank loans. The general theorem is: Loans
create deposits; the repayment of loans cancel
deposits. It is what economists describe as the *pure
creditary economy*. There is the flux of loan
principal from the banks, which refluxes back with
loan amortization.
Plot the flux and reflux on the same chart against
time. The process take place through time, hence the
flux may be said to *lead* its reflux. See the
attached illustration.
Depicted is the condition of quasi steady state, which
means things may be changing but the relationship
between the parameters is remaining constant. The
ratios or coefficients between the parameters are
remaining constant, etc. For example, if the flux
doubles, the reflux doubles concurrently. In
mathematical terms, we say that the rates of increase
to both flux and reflux are remaining constant. Such
change is depicted on plots by straight lines.
The instantaneous differential between the flux of
loan principal and its reflux depicted at T1 is the
rate of accumulation to account balances at T1.
The differential and therefore the volume of money is
not affected by interest, which is merely the transfer
payment from the account balance of one party to
another for services rendered--in this case financial
services.
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