| Subject: | RE: [socialcredit] Re: [SPAM] Re: [socialcredit] 10 can't pay 11 fallacy, again | | Date: | Tuesday, July 10, 2007 01:13:17 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
Thanks.
Anything as precise as "12.5" inferring a high degree of accuracy is unusual,
to say the least. I certainly had never heard of it, and obviously our Royal
Commission had not, but bnthen that is half a century dated now. Just what is it
based on, and when was it propounded?
Regards. John R.
From: John Hermann <hermann@picknowl.com.au>
Reply-To:
socialcredit@elistas.com
To: socialcredit@elistas.com
Subject:
[socialcredit] Re: [SPAM] Re: [socialcredit] 10 can't pay 11 fallacy,
again
Date: Mon, 09 Jul 2007 14:00:02 +0930
At 01:11 PM 9/07/2007, John
Rawson wrote:
Greetings John.
If you are going to use ratios like "12.5 times" you need to
state which country you are referring to. In NZ, for example, there is no
reserve ratio required, and theoretically no limit on bank lending other that
obtaining willing borrowers and the risk of asset transfers if the lending on one
bank outstrips the rest.
Regards. John R.
Hi John,
The ratio that I
mentioned has nothing to do with reserves as such or the reserve ratio. It is the
capital adequacy ratio, and to my knowledge it applies all over the planet, even
in countries like New Zealand which have a zero reserve requirement. Moreover
reserves don't matter much these days, even in countries like the U.S. which
retains a significant statutory reserve requirement (that's because
banks can always borrow whatever excess reserves they require - from within the
financial system - for their volume of lending). Each bank's lending is now
primarily constrained by the magnitude of its regulatory capital in relation to
its assets.
-- John Hermann
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