| Subject: | [socialcredit] Re: Extrapolating A+B Part1--replying to Leonardo | | Date: | Friday, September 23, 2005 11:50:50 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
[Ryan] But, again, the "compound interest formula"
describes a particular form of a contract, not a
process.
----
[Wild] A contract yes, but one which, the moment the
flow starts, it becomes a mathematical process applied
to the real world.
-->>
[Reply] It is not a process but a contract, which
states the computation that determines how much the
bank is contractually obligated to pay the depositor
when and if the depositor decides to withdraw his
balance.
Many banks have failed historically, defaulting on
their obligations, or didn't you know?
-------------------------------
[Ryan] 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.
----
[Wild] Considering that banks do NOT make new money,
which I presume you claim...
-->>
[Reply] That is not what I claim. I am assuming the
pure creditary economy, where all money derives from
bank loans, where all money is in the form of bank
deposits.
In the rudimentary model of such an economy, banks
r_e_c_e_i_v_e interest on negative balances, and p_a_y
interest on positive balances.
The differential between interest received and
interest paid is the gross profit of the banks, from
which banks pay ordinary business expenses, plus
dividends to their stockholders.
The incremental increase to positive account balances
is the instantaneous differential between the flux of
loan principal and its reflux in loan amortization.
Which is the ponderable money supply.
----
As to the "exponential" nature of pond scum in
general, yes, the surface area of pond scum in the
whole world today is probably somewhat different than
it was ten thousand years ago. I said it is probably
not much different. C_h_a_n_g_e of some sort will
certainly have occurred. There will be more scum or
less scum, though it is difficult to tell which is
actually the case.
The point is that the change has definitely NOT
occurred according to the "compound interest formula."
Otherwise, it would be readily apparent.
-
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