| Subject: | Re: [socialcredit] The State Theory of Money | | Date: | Monday, May 14, 2007 21:12:22 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
| In reply to: | Message 4740 (written by Peter) |
Not at all. The argument has been that banks charge interest etc. and pay out
nothing that will allow its payment. Look at the island example. This sort of
fallacy weakens our case.
Regards. John R.
From: "Peter" <cymric@xtra.co.nz>
Reply-To: socialcredit@elistas.com
To:
<socialcredit@elistas.com>
Subject: Re: [socialcredit] The State Theory of
Money
Date: Sun, 13 May 2007 15:52:31 +1200
" I must quibble strongly" - the arguement isnt that banks dont 'pay out', its
that banks havent created the money for the interest ( or paying principle more
thyan once).
Your argument John requires banks to make payments such as salaries and
expenses in new money, not out of money in circulation they have gained by
business operations as all other businesses, to hold water.
The argument that A cant pay A plus B is the same principle as loan principle
cant pay principle plus interest.
The latter argument simply is only a ( lesser) part of the problem and is all
that monetary reformers are capable of seeing, and the problem that is exposed by
the A plus B theorem remains at large.
I agree the 'pilgrim island' type expositions leave a lot to be desired,for
the reason I have just referred to. I am not conversant with 'pilgrim' one but I
can refer to the Salvation Island one, by Louis Even in "The Money Myth Exploded"
which is really just a monetary reform presentation claiming to be Social Credit,
werein the villan is interest and thus a serious misrepresenation of Social
Credit as associated with Douglas. This is the one that has been/is currently
being circulated in Pakuranga.
Regards 'grossly overestimating the gap' I have problems with this since there
is no commonly accepted benchmark to make any call as to a gap being measured
under or over.
Peter
----- Original Message -----
Sent: Sunday, May 13, 2007 10:15 AM
Subject: Re: [socialcredit] The State Theory of Money
While we have gone through all sorts of things as described by Wally and
Martin, our bright Minister of Finance (from whom we hold a letter, since revised
by him, stating that trading banks do not create money) has dropped onto an even
better gimmick. Claiming to budget at a surplus while continuing to borrow
billions annually. And with TV etc. backing, most Kiwis believe him!
Surely this whole situation is very simple? Each nation is likely to need an
infusion of new money over any significant period of time, to let its economy
function effectively. Orthodox economists must also accept this when they view
the growth of money supplies over time.
So the question comes down to who and how shall this be created? By some
public agency, for the benefit of the people, or by private ones to load them
with further debt and profiteer from the process.
At the same time, I must quibble very strongly by the claim of some Social
Crediters that banks "create debt but never pay out (any of) the means to repay
(or service) it". The classical example is in the Pilgrims' island example,
where the bad banker consistently starves, never even buying a solitary banana
from the industrious islanders. Unlike other businesses, they do not provide
goods, and their services are costed into the accounts of other concerns. But
they do pay out salaries, dividends, rent, power charges etc., and a defence to
the above statement would be that they pay out ALL their profits in some form or
other. Of course, while the process may be more involved, they do, in effect,
"save and reinvest". But I suspect this confusion is the concept that has led
many Social Crediters to grossly overestimate the "gap" in any total economy at
times.
Regfards. John R.
From: Martin Hattersley <hattersleyjm@interbaun.com>
Reply-To:
socialcredit@elistas.com
To: socialcredit@elistas.com
Subject: Re:
[socialcredit] The State Theory of Money
Date: Sat, 12 May 2007 11:43:06
-0600
>Niall Ferguson - who has published a well documented history of the
>house of
Rothschild and some interesting studies on world politics
>from the economic
point of view, makes a comment in "The cash nexus
>- money and power in the
modern world" that it is the nations with
>the biggest national debts that have
shown the greatest economic
>development.
>
>Not that National Debts are a good
thing, but they do provide the
>liquidity that keeps the economy moving!
>
>If
you're not familiar with Ferguson, I do recommend him as a good
>read.
>
>Martin Hattersley
>5929 - 189 St.,
>EDMONTON AB CANADA T6M
2J1
>
>e-mail:jmartinh@shaw.ca
>
>----- Original Message ----- From: "Richard
Cook"
><rickycook21@hotmail.com>
>To: <socialcredit@elistas.com>
>Sent:
Saturday, May 12, 2007 7:09 AM
>Subject: Re: [socialcredit] The State Theory of
Money
>
>
>>Re: Wally's analysis, this is exactly what happened with the U.S.
>>economy during the 1990s with the Clinton balanced budgets coming
>>at the
end of the decade. "Fiscal austerity" pushed the federal
>>government cost
burdens down to the states which gained tax
>>revenues from the "dot.com"
bubble. But when that burst, the U.S.
>>economy went into recession after
January 2000. What suffered the
>>most was state
and local infrastructure which has deteriorated
>>sharply even to the point of
starting to sell off public highway
>>systems to private investors as in
Indiana.
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>>From: Wallace Klinck
<wmklinck@shaw.ca>
>>>Reply-To: socialcredit@elistas.com
>>>To:
socialcredit@elistas.com
>>>Subject: Re: [socialcredit] The State Theory of
Money
>>>Date: Sat, 12 May 2007 00:34:14 -0600
>>>
>>>In Canada the Federal Government
in recent years has attempted, in
>>>compliance with misguided ideological
notions and technical
>>>misunderstandings regarding the virtue of "balanced
budgets" to
>>>curtail and even to reduce its debt. This has put a further
>>>financial burden upon the Provinces which, in turn, have attempted
>>>to
download financial responsibilities upon the
>>>municipalities--which have been
attempting to pass this burden on
>>>to individual citizens by way of increased
property taxation,
>>>multifarious user fees, decreased social benefits and
services,
>>>neglect of infrastructure needs, etc. This has naturally and
>>>inevitably led to general resentment and discord. I refer the
>>>reader
to Major Douglas's article, "The Fallacy of a Balanced
>>>Budget" where he
points out that, within the limits of orthodox
>>>financial cost-accountancy
conventions, a "balanced budget"
>>>means: 1) that the economy is static, 2)
that the financial
>>>implications are that we consume
our real capital concurrently
>>>whereas, in fact, it depletes or depreciates
slowly over the
>>>future, and 3) that all capital is actually, in final
analysis,
>>>owned by the issuer of credit, i.e., the banking system. Because
>>>of the growing deficiency of purchasing-power in the context of
>>>our faulty
orthodox monetary system, central governments tend to
>>>accept increasing long-
term debt in order to facilitate the
>>>operations of lesser governments but the
central governments meet
>>>opposition when spending programs and debt service
charges result
>>>in increasing tax burdens. Without central government
>>>assistance, the private sector is increasingly unable safely to
>>>meet
the necessity to accept expanding debt on its own without
>>>becoming increasingly insolvent. That is the dilemma presented
>>>by
orthodox financial policy and practice. It is the reason that
>>>an external
flow of consumer income is required to be injected
>>>into the economy, without
being registered as new costs, in
>>>order to make the system self-liquidating
and allow it to function
>>>in a viable manner.
>>>
>>>Wally
>>>
>>>
>>>On
11-May-07, at 3:19 PM, william_b_ryan@yahoo.com wrote:
>>>
>>>>"Money (dollars in
bank accounts of the Treasury) is
>>>>CREATED when the government spends money
into
>>>>existence."
>>>>------------------------------------------
>>>>-------------------------------------------
>>>>
>>>>Money
is created when any transactor deficit spends
>>>>with bank credit. The theorem
is that loans create
>>>>deposits; the repayment of loans cancel deposits.
This
>>>>theorem is very significant in an economy where most
>>>>transactions are
conducted by the transfer of bank
>>>>deposits.
>>>>
>>>>This is true whether the
transactors are private or
>>>>governmental institutions or
individuals.
>>>>
>>>>If you'll look at the diagram archived
at
>>>>http://www.geocities.com/new_economics/conrad-borrowing-2005.gif
>>>>
>>>>from
my good friend, Bud Conrad, you'll see that the
>>>>largest amount of bank credit
is represented by
>>>>consumer debt, the second largest is federal
>>>>government
debt, the third largest is business debt,
>>>>and the smallest is state and local
government debt.
>>>>
>>>>The theory that you outline is very close to the
State
>>>>Theory of Money concept that has recently been revived
>>>>by the
multi-millionaire Warren Mosler. The term was
>>>>originated by the German
economist Georg Friedrich
>>>>Knapp, a favorite of the Nazi's, who
experimentally
>>>>tested the theory at Theresienstadt, in
prototype of
>>>>their plans to control conquered peoples and races.
>>>>
>>>>In
point of fact, the Fed holds only a relatively
>>>>small percentage of federal
government securities. The
>>>>large majority are held by domestic and
foreign
>>>>commercial banking institutions.
>>>>-
>>>>
>>>>On May 10, 1:14 pm, "The
Trucker" <mik...@verizon.net>
>>>>wrote:
>>>>
>>>>For years I have been trying to
explain this stuff in
>>>>a way that even the minimally aware can understand
it.
>>>>Perhaps the best way to look at it is to (in you mind)
>>>>coalesce the Fed
and the Treasury into a single
>>>>harmonious group. That is the reality anyway.
These
>>>>two institutions work hand in hand to do the job of
>>>>government
finance and monetary control.
>>>>
>>>>Money (dollars in bank accounts of the
Treasury) is
>>>>CREATED when the government spends money into
>>>>existence. The
Treasury accounts in the central bank
>>>>(spelled Fed) are NEVER overdrawn or
insufficient.
>>>>
>>>>The problem then becomes the control of all this
money
>>>>that has been created and thrown into the helicopter
>>>>blades of government
to come to rest we know not
>>>>where. If the money is allowed to slosh around in
the
>>>>economy for too long then the amount of actual dollars
>>>>will grow too
large and the value of the dollars
will
>>>>erode. That is why we have taxes and the sales of
>>>>various types of
"interest" bearing mattresses called
>>>>government bonds. What else will the
rich people who
>>>>already have all the money they could ever use do
with
>>>>this extra money but to put it into bonds?
>>>>
>>>>That is what keeps
dollars scarce and keeps them worth
>>>>something; this sale of bonds and this
taxation. If
>>>>interest rates on the bonds are very low and there
is
>>>>inadequate tax revenue then the amount of real live
>>>>spendable money
increases and the currency is
>>>>devalued. That is what has been happening since
2000.
>>>>And if short term rates are kept low and government
>>>>borrows
on the sort term (lots of 6 month bonds) then
>>>>both money and bonds continue
to lose value. Over time
>>>>this _SHOULD_ attend to trade
imbalances.
>>>>
>>>>The time of reckoning is put off by the current
bond
>>>>holders. If they refuse to buy more bonds at low
>>>>interest rates then
the value of the bonds they
>>>>already own at low interest rates will
deteriorate
>>>>even more than that value has currently deteriorated.
>>>>You
must always remember that the only thing you can
>>>>get for a bond is money. And
if the value of the money
>>>>has eroded then so too has the value of the
bond.
>>>>
>>>>I keep using the word "value" and it is time to
>>>>address what it
means. Value
is measured in one's
>>>>control of labor and natural resources. Money
buys
>>>>both land and resources. As these prices rise we are
>>>>actually
witnessing the decline of the value of the
>>>>dollar. The apparent stock market
rise is also a part
>>>>of
that.
>>>>
>>>>
>>>>
>>>>______________________________________________________________________
>>>>______________Yahoo! oneSearch: Finally, mobile search
>>>>that gives
answers, not web
links.
>>>>http://mobile.yahoo.com/mobileweb/onesearch?refer=1ONXIC
>>>>---------------------------------------------------------------------
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introductory materials to the discussion topic of this list
>>>>are
at
>>>>http://www.geocities.com/socredus/compendium
>>>>You're subscribed to
this list with the email wmklinck@shaw.ca
>>>>For more information, visit
>>>>http://www.eListas.com/list/socialcredit
>>>
>>>---------------------------------------------------------------------
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introductory materials to the discussion topic of this list
>>>are
at
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list with the email
>>>rickycook21@hotmail.com
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>>
>>_________________________________________________________________
>>More
photos, more messages, more storage—get 2GB with Windows Live
>>Hotmail.
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>>
>>---------------------------------------------------------------------
>>Some
introductory materials to the discussion topic of this list
>>are
at
>>http://www.geocities.com/socredus/compendium
>>You're subscribed to this
list with the email
>>hattersleyjm@interbaun.com
>>For more information, visit
>>http://www.eListas.com/list/socialcredit
>>
>>
>>--
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incoming message.
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PM
>>
>>
>
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