(John Rawson wrote:- ) Surely, Joe, in that the banks create money of the
official denominations of each country, that makes it fraudulent? If they
issued their own named units of currency, backed by their own reserves or
securities, that would not.
I am sure forging notes requires considerable cost and a lot of expertise
if it is to succeed. Does that make it more acceptable?
(Joe replies:-) It's still all just 'credit', John. "Belief in
the beneficial outcome of some line of action."
The 'money', whether it's materialized as a 'banknote' or remains as
'figures' in someone's bank account that's going to be drawn upon by cheque or
some other means, is simply 'credit'. 'Belief' backing a
'ticket'.
The ticket, in whatever form it's 'accepted' as, is accepted solely because
someone 'believes' they can get what they want in exchange for it. They
believe, and are generally justified in their 'belief', that a 'ticket' that a
bank has assumed as its liability, is more certain of general acceptance than
one issued by you or I or any other individual.
The only 'value' in the 'ticket', to you, is that it enables you to draw
from the pool of goods and services available. And available
because the 'credit' it represents facilitated the whole
production/consumption process.
Originally, you issued your own 'ticket', your IOU that
specified some particular thing you would hand over to the bearer 'on
demand'.
And, to whomever originally 'accepted' your IOU in exchange for something
he posessed, or to whomever 'accepted' it from him, however many times it
changed hands, your IOU was 'money' as long as it was accepted right up
until it was redeemed..
The IOU in our times, is not generally circulated this way anymore
in our countries. though during the Depression, when Roosevelt
closed the banks in the US, some companies printed their own 'money',
exchangeable after a certain period for US banknotes when they were expected
to be available again.. They were 'accepted' on 'faith', because there
was nothing else to do but accept them if one wanted to continue to do
business.
Now as Douglas has told us, modern money is not primarily just a 'medium of
exchange' anymore, in that it is attached to some particular 'commodity', like
the IOU once was. Or even one commodity ~ 'gold', or 'silver'
.
But it is purely now just a 'ticket' that allows the bearer to draw upon
the great pool of wealth that modern productive methods have made possible.
I still do not see why there is such emphasis made by many Social Crediters
in removing the ability of the banks to 'create' credit. To me, this
'creation' is simply 'generalising' the acceptance of a ticket, coupled with
the assumption of liability for what has been created.
It is the provision of a necessary service, and it is a service that I
believe can be most efficiently delivered the way it is.
If you are worried about paying interest to a private institution, consider
the effects of the Social Credit proposals, properly implemented on
that.
Interest has three components. The cost of the financial services
provided, and they do definitely have a cost. An allowance for projected
inflation, which will dilute the purchasing power of the interest received
over the life of the loan in relation to the costs of ongoing banking
services. And an assessment for 'risk'. And there is an element of
'risk' in every loan.
Now we have Social Credit. The consumer price level through the
operation of the CPD coupled with advances in technology is falling. The
'inflation' factor in interest is potentially obliterated.
The provision of sufficient effective demand at all times to clear the
market eliminates the largest factor in 'risk' for most loans ~ a credit
contraction causing a fall in sales and diminished profits.
Further, it is conceivable, I believe, that with a falling general
price level, banking service costs, like most other costs, will diminish over
time. So where is the problem that requires such a centralization of all
credit creation into the hands of a NCA?
From: Joe Thomson <thomsonhiyu@shaw.ca>
Reply-To:
socialcredit@elistas.com
To:
socialcredit@elistas.com
Subject: Re: [socialcredit] A brief
outline of Social Credit
Date: Fri, 02 Mar 2007 18:43:34
-0500
>Further to my previous response, "McCrary" should've been
"McNary."
>
>In regards to Vic's piece, he states on Lines
287-290 :- "THEY CREATE IT. In
>the terse phrase of the English
economist, Hawtrey, "They create the means
>of payment out of
nothing."
>
>Now this phrase seems to me to be true enough if we
viewed 'nothing' simply
>as an intangible. Something that does exist
but doesn't have any physical
>form. But I don't think that's
necessarily the context most Social
>Crediters use it
in.
>
>Rather I've come to think it's often used to create a
sense of revulsion at
>what the bank is doing. As if it's engaging in
something 'fraudulent'.
>
>But if we are operating under a
purely 'creditary' system now, is there
>anything 'fraudulent' in what
the bank does?
>
>Certainly if it was still issuing promises to
pay 'on demand' in 'gold' it
>was supposed to have, but didn't, the
argument could be made with conviction
>that it was. But we've moved
beyond that, I think..
>
>And is there anything 'fraudulent'
about 'generalising' the borrower's
>creditary instrument, his
promissory note, and transforming it into
>something that is
acceptable in the broader community as forms of credit
>that can be
used as 'money'? Especially when the bank, and ultimately
its
>shareholders, are on the hook for the extent of that
credit?
>
>In Line 304, Vic states:- " The actual creation of
credit is an almost
>costless operation."
>
> Viewed in
the sense of how long it takes a banker to write some figures on
>a
piece of paper, or maybe now push a few keys on a computer, we could
say
>this is true.
>
>But it certainly isn't true when
viewed in the larger sense of what's
>actually involved in banking as
a whole. The banks DO have costs, and I
>believe they are substantial.
Even for the modern 'on-line' versions, like
>ING Direct. Making loans
is NOT 'costless'. Far from it.
>
>Again, it seems to me, that
there is a conscious or unconscious effort to
>create a sense of
revulsion in regards to what banks do.
>
>Now I am hardly one
who enjoys defending banks. I think there are a great
>many areas in
which they roundly deserve to be criticized, and in which
>their
actions are utterly unconscionable.
>
> And I think we've become
too lax in our oversight and regulation of them,
>and the 'powers that
be' that we elect to office are often far too trusting
>that the
banker 'knows best'.
>
>But I don't think we serve our cause
well by creating impressions in the
>minds of the general public that
will end up eventually casting us in a bad
>light as 'cranks' when
it's revealed, as it will be, that banking is
not
>'costless'.
>
>Joe.
>
>
>
>---------------------------------------------------------------------
>Some
introductory materials to the discussion topic of this list are
at
>http://www.geocities.com/socredus/compendium
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