| Subject: | Re: [socialcredit] The Stream of Increasing Spending | | Date: | Tuesday, July 17, 2007 15:52:49 (+1200) | | From: | William Hugh McGunnigle <wmcgunn @.........nz>
|
| In reply to: | Message 4925 (written by william_b_ryan) |
Reference the on going argument about money creation and destruction.
May I respectfully point out reality.
Under our present financial system the only time that sufficient
funding becomes available for an expansion of the economy and a
consequential expansion in research and developement is when the system
allows and increse in the indeptedness of the entire human race to the
Banking system. With respect to you all, the arguments I have been
witnessing do not address or even accept this axiom. If you are unable to
accept this fundamental evidence from historical data it seems to me that
your arguments are becoming quite pointless.
In truth arguing about what is a fact and not addressing yourselves to
finding or even proposing a solution to the problem is futile.
We have to find a way of expanding the money supply to enable
improvements in the human condition to take place. Our present system does
not do this. It operates in quite the reverse. Vast numbers of human beings
are exploited and starved, not because their countries lack resources, but
because the present financial system will not provide the necessary money
supply to be made available for them to exploit them for their own benefit
at a resonable cost. It is evil. Social Credit was the first time that
someone proposed a method whereby this could be overcome with incurring
crippling debt. Naturally international banking systems try to discredit the
concept, and "orthodox" economists support them despite increasing evidence
that "orthodox" financial thinking does not solve any of the problems
inherent to the system. I am seeing a whole realm of people arguing from an
"orthodox " standpoint about a fresh financial system that does away with
all the sacred concepts inherent to the present system. That is why you are
going around in circles and not producing valid and concrete proposals about
a finacial method to replace our present flawed system. Admittedly you need
to understand the present system before you can change it, and all the
correspondents show a a staggering knowledge and understanding of the
present system. Can we now move to the next step instead of arguing about
why the present system is failing?
Bill Mc Gunnigle
----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Monday, July 16, 2007 3:12 PM
Subject: [socialcredit] The Stream of Increasing Spending
> "MG: What percentage of the money supply is not
> principal, please provide references."
> ------------------------------
> -------------------------------
>
> I cannot improve on this from a standard reference to
> the new economics:
>
> "The totality of bank deposits plus currency, M3, is
> approximately 10% greater than bank credit, C1. M3 -
> C1 devolves from Fed open market operations funding a
> portion of government spending, and the small residual
> from the era of gold and silver monetization, and
> greenbacks. Checking deposits plus currency, M1, is
> approximately 20% of M3. M1 derives from the composite
> of Fed open market operations and bank credit
> expansion. M3 - M1 devolves in the first instance from
> M1. M3 - M1 constitutes a revolving fund of finance
> that is a continuing source of loanable funds.
> Loanable funds in the aggregate derive from the
> composite of bank credit expansion and the revolving
> M3 - M1. In a growing economy, M3 - M1 is an expanding
> nodality with inputs that exceed outputs. But the
> outputs are funds that are being invested or spent.
> The stream of increasing spending is therefore
> financed by bank credit expansion, Fed open market
> operations, and disbursements from M3 - M1."
> -
>
> "MG: But do discount loans create deposit money or are
> they extraneous to money creation?"
> ------------------------------
> -------------------------------
>
> In reference to discount loans by banks, as with all
> loans by banks, the theorem is that loans create
> deposits and the repayment of loans cancel deposits.
> -
>
> "MG: But is it not true that interest charged as is
> practiced by 99% of loans is not paid as a single time
> service charge and that interest continues to accrue
> until the last payment period?"
> ------------------------------
> -------------------------------
>
> Only as a matter of the wording in specific contracts,
> not as a physical process. It only goes to how the
> interest is calculated, which may be worded quite
> differently to arrive at the same interest paid for
> the same time that principal is held when the loan is
> fully amortized. To repeat, a loan contract is not a
> physical process but a contract for future
> performance. Pond scum analogies are irrelevant
> inasmuch as they describe physical processes. Because
> of the multiplicity in the ways that loan contracts
> may be worded, which have the potential for much
> confusion, the Truth in Lending law in the United
> States requires that most loan contracts be translated
> into what is called the "APR," which permits consumers
> to more reasonably compare one loan contract with
> another in terms of their relative cost for credit
> received.
> -
>
> "MG. Is this the other source of money creation you
> allude to above?"
> ------------------------------
> -------------------------------
>
> Well, it's a source, but not a very important source
> in the total scheme of things. It's not even
> mentioned in the "stream of increasing spending"
> description I gave above that lists the major sources.
> Because it is something real--deriving from the rules
> of double entry accounting, where banks are simply
> crediting deposit accounts which are among their
> liabilities in their charts of accounts--it is quite
> sufficient by itself to defeat the 10 can't pay 11
> fallacy that falsely assumes that the 10 is all the
> money in existence from which both the principal and
> interest can be paid.
>
>
>
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