| Subject: | Re: [socialcredit] 10 can't pay 11 fallacy, continued | | Date: | Monday, July 16, 2007 20:12:48 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
| In reply to: | Message 4927 (written by Richard Cook) |
Thanks Richard. I am sure that, in any scenario, there are exceptional
circumstances like your second point that cause a glitch out of the ordinary.
But for your first; could you please expand a bit? It seems to me that, in the
course of production and sale of the products, there must be continuous
transactions both ways with the banks? Inflow to the banks must be greater than
borrowing because of the interest factor, but a proportion equivalent to this
would be spent by the banks and thus available to purchase some of the products?
Regards. John R.
From: "Richard Cook" <rickycook21@hotmail.com>
Reply-To:
socialcredit@elistas.com
To: socialcredit@elistas.com
Subject: Re:
[socialcredit] 10 can't pay 11 fallacy, continued
Date: Mon, 16 Jul 2007
10:08:31 -0400
>On the question of causes of deficiency in purchasing power I
would
>like to suggest that another cause besides reinvestment may be
>borrowing from banks at multiple points in the production process
>and also
debt the firm is saddled with when it is subjected to a
>leveraged buy-out, etc.
Any comments?
>
>
>
>
>
>
>
>
>
>>From: "John G Rawson"
<johngrawson@hotmail.com>
>>Reply-To: socialcredit@elistas.com
>>To: socialcredit@elistas.com
>>Subject:
Re: [socialcredit] 10 can't pay 11 fallacy,
continued
>>Date: Mon, 16 Jul 2007 10:55:46 +0000
>>
>>
>>Thanks, Martin. Just
covering my argument a little to allow for
>>the finer points of banking, to try
to avoid being led off on a
>>side issue..
>>
>>Obviously, if a manufacturer
invests some of his income in new
>>production, that sum is charged into two
sets of goods and only
>>used to purchase one. We are all familiar with that
scenario.
>>
>>I am sure the banks do not pay out all their earnings as salaries,
>>rent, power and fleet charges etc. But I am also sure that the
>>process
is confused in their case because of the destruction of
>>money paid back to
them and re-creation when they pay out. I think
>>this covers the "early
retirement of money" case that has
been
>>quoted.
>>
>>The more I see of argument here and elsewhere, the more I
feel that
>>the only cause of the deficiency in purchasing power is
>>reinvestment. I know Douglas quoted raw materials, which was
>>correct
for the businesses he studied. But then he didn't study an
>>organisation that
produced nothing but raw materials.
>>
>>Regards. John R.
>>
>>
>>From:
Martin Hattersley <hattersleyjm@interbaun.com>
>>Reply-To:
socialcredit@elistas.com
>>To: socialcredit@elistas.com
>>Subject: Re:
[socialcredit] 10 can't pay 11 fallacy, continued
>>Date: Sun, 15 Jul 2007
12:42:12 -0600
>> >John -
>> >
>> >Would you expand a little on the concept of
"reinvestment in
some
>> >form"? I'm not clear what you mean by this, even though it is a
>>
>promising lead.
>> >
>> >Martin Hattersley
>> >5929 - 189 St., NW
>>
>EDMONTON AB CANADA T6M 2J1
>> >(780)483-5442
>> >
>> >e-mail:
jmartinh@shaw.ca
>> >
>> >----- Original Message ----- From: "John G Rawson"
>>
><johngrawson@hotmail.com>
>> >To: <socialcredit@elistas.com>
>> >Sent: Saturday,
July 14, 2007 5:37 PM
>> >Subject: RE: [socialcredit] 10 can't pay 11
fallacy,
>>continued
>> >
>> >
>> >>Thanks, Bill. I agree with this absolutely
except for one
>> >>reservation: banks also carry out the equivalent of
reinvesting;
>> >>they do not pay out
all their income in the way you suggest.
>> >>
>> >>But your argument shows up
the fallacy in the "Island" example
>>and
>> >>I believe it explains why many
Social Crediters have brought
>> >>ridicule on the movement by greatly
overestimating the "gap" in
>>the
>> >>eocnomy as a whole.
>> >>
>> >>And I
stick with my suggestion that the main, possibly sole,
>>cause
>> >>of the
discrepancy Douglas discovered can be attributed to
>> >>reinvestment in some
form, where costs are charged twice into
>>the
>> >>price of goods but the
equivalent purchasing power is only paid
>>out
>> >>once.
>> >>
>> >>Regards.
John
>>R.
>>
>>
>> >>
>> >>------------------------------------------------------------------------------
>> >> From: <william_b_ryan@yahoo.com>
>> >> Reply-To: socialcredit@elistas.com
>> >> To: socialcredit@elistas.com
>> >> Subject: [socialcredit] 10 can't pay 11 fallacy, continued
>> >> Date: Thu, 12 Jul 2007 09:44:00 -0700 (PDT)
>> >> >"Therefore, I suggest: a) Two boxes one for the
>> >> >principal the other for interest: b) The interest can
>> >> >be reused but only paid in full only at the end. c)
>> >> >The principal paid cannot be re-used."
>> >> >------------------------------------------
>> >> >
>> >> >Naturally on these restrictions 10 cannot pay
11. When
>> >> >10 in principal is repaid there is a remaining
>> >> >1 owed
that cannot be paid
>>inasmuch as there is no
>> >> >money in existence. It must
be borrowed thereby
>> >> >compounding the debt. That is how this fallacy
goes.
>> >> >
>> >> >But it doesn't begin to describe the real world
>> >> >condition.
In the real world banks are members of
>> >> >their communities, spending for
goods and services
>> >> >needed to perform their services and conduct their
>>
>> >operations, as does every firm in their communities.
>> >> >The economy is a
great cooperative commonwealth in
>> >> >continuous rotation. So, during the
period that 1 in
>> >>
>interest accrues, banks are spending, which increases
>> >> >the money in circulation available to pay both
>> >> >principal plus interest back to the banks.
>> >> >
>> >> >If banks create the money that
>>they loan, they are
>> >> >certainly capable of creating the money that they
>> >> >spend during the period that 10 is lent and 11 becomes
>> >> >due, before they have received the first payment in
>> >> >this tortured example. During this period their
>> >> >spending is charged against their accrued income
>> >> >accounts.
>> >> >
>> >> >It's all done according to the rules of double entry
>> >> >accounting consistent with the concept of
profit and loss.
>> >> >
>> >> >
>> >> >
>> >>
>> >>
>> >>
>>
>____________________________________________________________________________________
>>
>> >TV dinner still cooling?
>> >> >Check out "Tonight's Picks" on Yahoo!
TV.
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>> >>
>> >>
>>
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