(Peter wrote:-) The banks claim of
ownership is a fraud according to Douglas, as we have had
quoted.
(Joe replies:-) But how do the Banks
exercise this "claim of ownership? Is it not only exercisable
through the borrower's inability to repay? And shouldn't that depend
on whether it's the banks or the borrower that've caused this inability to
repay?
For aren't there really two separate
things here? The first is the question of whether or not the
borrower, in the case of an individual business, say, is
capable of providing some good or service that the public actually
wants.
And wants at a price sufficient enough,
whether it's a regularly computed price, as now, or one discounted as
would be all prices through the CPD under SC, for the business to be
profitable.
For if his business has borrowed
'money', it will be from his profits this 'money' will be repaid, will it
not?. If no one wants his product, for whatever reasons ~ maybe
he's got a poor product line, maybe he's a poor manager, runs
a sloppy store, can't get along with his customers, hires poor
employees, whatever ~ and he's not profitable (through his own
actions), who takes the hit when he can't repay?
Now he's in default, and the Bank that lent
him the funds claims whatever he's put up as collateral security, if
anything. Because that Bank is on the hook for whatever portion of
the funds it's advanced him that have been paid out by the borrower to
other parties, and for which the Bank has not yet been repaid by
him.
And though they may have created the credit
out of nothing, it will not exactly be from 'nothing' that they have to
then meet these liabilities. There will be a reduction of the
shareholder's equity in that bank proportional to the size of the
defaulted unpaid loan balance.
Banks can indeed 'go broke' from too many
defaulted loans, and their shareholder's 'capital' can indeed
disappear. (Generally, in Canada, a Bank with too many potentially
'problem' loans would be forced to find more 'capital', probably through a
merger with another bank.
The second thing is the action of the entire
banking system, in the 'macro-economic sense'. Where, through their
policies, ones designed in the belief that they are 'protecting their
interests' , they cause a general 'credit contraction' to occur.
Which affects the amount of 'effective demand' present in the economy in a
negative way that causes 'sales' and business 'profit' (from which loans
will be repaid) to fall.
In this case the individual business may have
a product that is needed, or genuinely desired, be well managed, have good
employees, excellent customer relations, etc., yet still fail. Not
through the individual actions of the entrepreneur, but through the
actions of the banking system as a whole in causing a credit crunch, and a
pinching off of the business's expected profits and ability to keep
current on its loan repayments.
I don't think Social Credit can do a single
thing in regards to the first instance above. There are always going
to be people who enter businesses, often on borrowed money, and find they
are just not cut out to be in that business. Does the Bank violate
some sacred principle when it forecloses on whatever it can to try to
recover its loss in such instances?
Is it really any different than you putting
collision insurance on your car, having an accident that renders it an
unrepairable write-off, collecting the insurance pay-out, and then having
the insurer try to sell what's left of the wreck to try to offset some
of that pay- out? You have claimed, for the premium fee you
paid when you made the insurance contract, the insured amount of your
vehicle. The insurer, on payment and fulfilment of his part of that
contract, has claimed what's left of your car.
In the second, 'macro-economic'
instance above , Social Credit can indeed make an enormous
difference. By ensuring that there is always sufficient 'effective
demand' present (in the aggregate) to fully liquidate 'debt' (in the
aggreagate), the greatest single failure factor for most businesses,
the 'risk' of a credit contraction affecting sales and profit, has
been removed. There will still be 'risk' in regards to individual
businesses, but the major one that affects all businesses has been
neutralized.
And by using credit through the CPD, (and
ND), the physical realities of lower cost production through technical
effficiencies, can be reflected in a falling price level without a fall
off in business profit. Inflation, and the present necessary
allowance for it inherent in the interest rate, is also eliminated.
And what we have is the Banks then being paid primarily for the service
they provide, hopefully in a genuine 'competition' with one
another. And what's wrong with
that?
Re: [socialcredit]
Reply to this message
