| Subject: | [socialcredit] 10 can't pay 11 fallacy, again | | Date: | Friday, July 6, 2007 03:50:51 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
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"The money for the interest is not created, that's my
beef. Sure, the debt for the interest is added to the
debt for the money principle but you can't say the
interest is 'created out of thin air' like the chips
are created out of thin air."
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Again, the word is spelled p_r_i_n_c_i_PAL when
referring to the principal of loans. But sure it is,
the money for the interest is most definitely created.
Banking is a function of double entry accounting in a
creditary economy. At the beginning of T1, 10 are
lent, and 11 must be repaid at the beginning of T2 in
loan amortization. During T1 the banks spend thereby
creating 1 into circulation for their salaries, wages,
dividends and ordinary business expenses, so at the
beginning of T2, 11 is in circulation. The money that
the banks spend is charged, as a matter of accounting,
against their accrued profit accounts. This is
allowable because by the rules of accounting profit
accrues contractually even if not yet received in cash receipts.
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10 can't pay 11 fa
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