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Message 3194
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| Subject: | Re: [socialcredit] Swanwick no. 2 | | Date: | Friday, December 9, 2005 04:56:05 (-0800) | | From: | William B. Ryan <w_b_ryan @.....com>
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(Michael wrote:-) If you used it to purchase new
stock issue, it would not be any different than if you
used your earnings for the same thing; and per
Swanwick #2 you are not going to do either, because
production is not going to be financed that way any
more.
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Douglas was perhaps the first to recognize that the
incremental increase to investment for the economy as
a whole is not now financed from savings but credit.
It is mathematically impossible for it to be
otherwise. That was in the early 1920s. In the
mid-1930s Keynes said that savings are a "residual."
So Swanwick 2 is not instituting a new mechanism but
is recognizing the existing reality so that it might
be formalized and controlled.
--- Joe Thomson <thomsonhiyu@shaw.ca> wrote:
> (Michael wrote:-) If you used it to purchase new
> stock issue, it would not be any different than if
> you used your earnings for the same thing; and per
> Swanwick #2 you are not going to do either, because
> production is not going to be financed that way any
> more.
>
> (Joe replies:-) This leads me to ask how do you
> envision production being financed? Suppose I
> decide to expand production in my mill and opt to
> sell treasury stock, perhaps to one or more people
> who might want to join me and take an active role in
> the business, rather than the firm borrowing the
> funds needed. Are you saying that such a potential
> investor could not use his 'savings' directly to
> invest, but would have to seek a 'bank loan'
> instead? If this were the case, are we not back to
> another examination of Douglas's 'pound for pound'
> letter to Denis Byrne? Beyond that, are we not
> imbuing the 'banks' with an increase in their
> 'monopoly' powers if we interpret Swanwick # 2 in a
> 'micro-economic' manner? The decision on whether
> to grant 'new credit' on an 'individual' basis is
> still going to be made by the bank as a practical
> matter, (remember, Douglas called the administration
> of the banks 'admirable' ~ and if deciding who is
> likely to be able to repay a loan or not is not
> 'administration', I hope you or someone else can
> tell me what is.) If the banks decide that 'new
> credits' are, in THEIR opinion, not warranted on a
> particular 'individual' basis, and we interpret
> Swanwick # 2 'microeconomically' and the would-be
> private investor is forbidden to use his 'savings'
> directly at HIS discretion, have we not just further
> enhanced the 'monopoly of credit'?
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