| Subject: | Re: [socialcredit] 10 can't pay 11 fallacy, again | | Date: | Monday, July 9, 2007 10:24:11 (-0600) | | From: | Martin Hattersley <hattersleyjm @.........com>
|
| In reply to: | Message 4907 (written by Peter) |
Peter -
Banks do pass on their costs, just like other businesses. The costs of
staff, premises equipment and profit have to be matched through the interest
rates that they charge to their borrowers.
It's an entirely different cycle from the creation and destruction of credit
which is the other feature of banking.
How else would you expect it to be?
Martin Hattersley
5929 - 189 St., NW
EDMONTON AB CANADA T6M 2J1
(780)483-5442
jmartinh@shaw.ca
e-mail: hattersleyjm@interbaun.com
----- Original Message -----
From: "Peter" <cymric@xtra.co.nz>
To: <socialcredit@elistas.com>
Sent: Sunday, July 08, 2007 6:52 PM
Subject: Re: [socialcredit] 10 can't pay 11 fallacy, again
> Businesses may borrow on pay day, depending on their cash flows, but I
> dont think banks need to borrow because of cashflow rates are slow or
> intermittant.
> Can anyone quote banking practice references that banks are so public
> spirited as claimed?
> I ask again, are banks the only businesses that dont pass on their costs
> as all businesses do?
> Peter
> ----- Original Message -----
> From: "Martin Hattersley" <hattersleyjm@interbaun.com>
> To: <socialcredit@elistas.com>
> Sent: Monday, July 09, 2007 6:52 AM
> Subject: Re: [socialcredit] 10 can't pay 11 fallacy, again
>
>
>> Per -
>>
>> "A bank manufactures credit, just as a steel plant manufactures steel."
>>
>> So when payday is due for bank employees, the bank writes cheques on
>> itself which are accepted by the employees as money. These are charged
>> against its profit and loss account. That account is fed by the interest
>> that is charged to borrowers from the bank. Hopefully, even after paying
>> its staff and other overhead expenses, there will be enough surplus to
>> pay dividends to its shareholders, as well as retaining earnings which
>> can be used to increase
>> the bank's holdings of physical assets.
>>
>> Those payments that it makes to staff and shareholders, and in acquiring
>> physical assets, provide the dollars to the public which, after passing
>> through the normal processes of business, enable the borrowers to pay
>> interest to the bank on their loans.
>>
>> No great problem there. If you like to think of it in another way, the
>> bank lends to itself by creating money to meet its payroll and other
>> expenses, and repays that loan from the interest payments it receives as
>> a result of the services of its staff in making loans.
>>
>> Martin Hattersley
>> 5929 - 189 St., NW
>> EDMONTON AB CANADA T6M 2J1
>> (780)483-5442
>> e-mail: jmartinh@shaw.ca
>>
>> ----- Original Message -----
>> From: ""Per Almgren, Nordiska sparlån"" <info@nordspar.se>
>> To: <socialcredit@elistas.com>
>> Sent: Sunday, July 08, 2007 5:32 AM
>> Subject: Re: [socialcredit] 10 can't pay 11 fallacy, again
>>
>>
>>> At 12:50 2007-07-06, you wrote:
>>>>"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."
>>>>-----------------------------------
>>>>------------------------------------
>>>>
>>>>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 and interest payments. 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.
>>>
>>> Can you explain, in detail, how this extra 1 is spent into
>>> circulation without creating a corresponding debt?
>>>
>>>>The money that the banks spend is charged, as a matter of accounting,
>>>>against their accrued profit accounts.
>>>
>>> If the borrowers debt accounts is charged daily with the daily
>>> interest part of what they are supposed to pay in cash or from other
>>> accounts at the end of the period, but they themselves are not
>>> entitled to use that money at the corresponding credit accounts,
>>> doesn't that mean that the bank is borrowing interest-free from the
>>> credit accounts until the borrowers actually pay their accrued
>>> interest amounts? ;-)
>>> And what happens if the bank doesn't completely use the interest for
>>> payments of expenses? It may prefer to increase its liquidity (cash
>>> money) so it stays compatible with the increasing amounts on
>>> different accounts. In that case the borrowers are forced to borrow
>>> more to fill the difference, or they will experience a society with a
>>> shrinking economy!
>>>
>>>>This is allowable because by the rules of accounting profit
>>>>accrues contractually even if not yet received in cash receipts.
>>>
>>> But even the bank can't use money to pay with until they actually
>>> have got them, either from inpayments from outside or by borrowing
>>> internally from their customers accounts. So debt is created before
>>> money can be spent. That means that interest is hard to pay if you
>>> don't have anybody that borrows that money in advance.
>>> Per Almgren
>>>
>>>
>>>>
>>>>____________________________________________________________________________________
>>>>Be a PS3 game guru.
>>>>Get your game face on with the latest PS3 news and previews at Yahoo!
>>>>Games.
>>>>http://videogames.yahoo.com/platform?platform=120121
>>>>---------------------------------------------------------------------
>>>>Some introductory materials to the discussion topic of this list are at
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>>>>You're subscribed to this list with the email info@nordspar.se
>>>>For more information, visit http://www.eListas.com/list/socialcredit
>>>
>>>
>>> ---------------------------------------------------------------------
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>>>
>>
>>
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>
>
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