| Subject: | Re: [socialcredit] U.S. Economics Test | | Date: | Sunday, August 12, 2007 16:33:59 (-0400) | | From: | Keith Wilde <keithwilde @.........ca>
|
| In reply to: | Message 4961 (written by william_b_ryan) |
Even more astounding is the following snippet that I received today from a
colleague who is trying to promote monetary literacy. Has that old manual
from the Fed finally been superseded by "idiocracy"?
Keith
HOW BANKS CREATE MONEY
Banks create money "merely by giving their promises to pay". (7)
"What they do when they make loans is to accept promissory notes in
exchange for credits to the borrowers' transaction accounts." ".
they do not pay out loans from the money they receive as deposits. If
they did this, no additional money would be created." (8)
Borrowers "spend" the credits by writing cheques.
(7) "Modern Money Mechanics", Federal Reserve Bank of Chicago, 1994, p.3.
(8) Ibid. p.6
----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Sunday, August 12, 2007 3:02 PM
Subject: Re: [socialcredit] U.S. Economics Test
> Yes, dumbing down. But I really had thought that it
> was generally accepted now by economists that loans
> create deposits, rather than deposits funding loans.
> Then I was really astounded when I saw the report the
> other day in The New York Times of the 12th grade
> economics assessment. It's not just that it is a
> single stupid question from the test, but one that's
> trumpeted by the promoters themselves as being
> representative of the test.
>
> Attached is a short excerpt from Mark Scneider,
> Commissioner--National Center for Education Statistics
> of the U.S. Department of Education, at Wednesday's
> presentation and press conference. The full audio and
> video is at http://www.c-span.org
>
> "The Nation's Report Card: Economics 2006" was
> released by the National Assessment Governing Board.
> The report contains achievement results for U.S.
> 12th-grade students on the 2006 National Assessment of
> Educational Progress (NAEP). The report includes data
> on economics course-taking and provides examples of
> what students know-and don't know-about national and
> international economic issues and personal finance
> topics.
> 8/8/2007: WASHINGTON, DC: 53 min.
> ----------------------
>
> The following is from Douglas's 1923 testimony in
> Ottawa. The page numbers refer to the PDF that I
> posted on Friday.
> -
>
>>>>page 33
> Douglas: The deposits of money in a bank are only a
> smoke screen for the major operations of the bank. If
> the public could not see that a certain amount of
> money went into a bank, they would not believe that it
> was possible for any considerable amount of money to
> come out of it. But the bank's business is a loss in
> respect of its deposits, and only part of it in
> respect of its disbursements. It has to carry on a
> certain amount of business at a loss in order to form
> a screen for the very much larger amount of business
> which it carries on at a profit, but it would be
> perfectly possible for a modern banking business to
> function exactly as it does at the present time
> without any deposits.
>
> By Mr. McMaster: Q. So they pay three per cent and
> invite the public to deposit by advertisements just to
> get a smoke screen?-
>
> A. I should say that.
>
>>>>page 34
> Q. Tell us how a bank could function without deposits.
> It has a small nominal capital, but it has no
> deposits. Will you just carry us through the stage of
> that operation?-
>
> A. It is really very simple. If a bank could issue a
> draft for any amount, a banker's draft for any amount,
> which would always be accepted as money and would
> never be asked for in the form of legal tender-
>
> Q. Suppose I were going to London and I wanted to buy
> a draft on London, would I never be asked for the
> money?-
>
> A. They probably would ask, but I say under certain
> circumstances.
>
> Q. If a bank did not have any deposits or any capital,
> how would they pay that? How would they pay? For
> instance the London and Midland Bank, say.-
>
> A. The only liability of a bank is to pay legal tender
> on demand. If there is no demand for legal tender, if
> its draft is always accepted without changing it into
> anything else, or if it were in the position of being
> able to issue $1 cheques, which passed from hand to
> hand as $1 notes, then just so long as that
> hypothetical state of mind exists, I mean it could not
> exist, because it is not practical, but just so long
> as it existed, that bank could carry on a flourishing
> business without having any deposits. In other words,
> it would be creating its own currency and these would
> be claims on goods. It would not be paying these
> claims on goods.
>
> Q. When you say a bank could carry on business without
> any deposits and practically without any capital, is
> not that putting it in a pretty extreme way?-
>
>>>>page 35
> A. I do not say that it could in the sense that it is
> a practical proposition, but I say that it might.
>
> Q. If everybody believed it could be done?-
>
> A. If everybody believed it could be done.
>
> Q. That is to say, banking might be based on a state
> of mind, and not on deposits?-
>
> A. I should say banking is based on a state of mind at
> the present time.
>
> By Mr. Stevens: Q. Do you think this case that you
> mention is within the realm of possibility in
> practical business?-
>
> A. All I can say is that the British clearinghouse
> deposits during 1922 showed that only 1.7 of 100 per
> cent of the business of the country was done in legal
> tender.
>
> By Mr. Spencer: Q. I would like to ask Major Douglas
> if he considers that all loans create deposits to an
> equal amount?-
>
> A. I do.
>
>>>>page 38
> ...By Mr. Irvine: Q. On page 43 [of the Bankers'
> Association pamphlet they were discussing], arguing on
> that, that the farmer should not be allowed to have
> any more credit because "the money they lend (that is,
> the bankers) represents customers' deposits, which
> they must be ready at all times to pay on demand."
> Have you any remarks to make in that regard?-
>
>>>>page 39
> A. Yes. I think that that is yet another instance of
> the extraordinarily careful wording of this pamphlet.
> You see that that paragraph says-I have it written
> down here, "the money they lend represents customers'
> deposits." Represents customers' deposits. You will
> notice that it does not say that the banks lend
> customers' deposits. That is a very, very tricky and
> careful difference. It states carefully-loans and
> deposits are a reflection of it-but it does not state
> what is the fact, that the loan comes first, that it
> is the loan which creates the deposit, not the deposit
> which enables them to make the loan.
> -
>
>
> --- Richard Cook <rickycook21@hotmail.com> wrote:
>
>> It's part of the official dumbing-down educational
>> policy. Check out the
>> movie "Idiocracy."
>>
>>
>> >From: "Keith Wilde" <keithwilde@sympatico.ca>
>> >Reply-To: socialcredit@elistas.com
>> >To: <socialcredit@elistas.com>
>> >Subject: Re: [socialcredit] U.S. Economics Test
>> >Date: Thu, 9 Aug 2007 22:49:09 -0400
>> >
>> >The sinister aspect is the possibility that these
>> high school teachers do
>> >believe that one of these is the right answer. That
>> means someone told them
>> >so. Who?
>> >
>> >----- Original Message ----- From: "John Hermann"
>> <hermann@picknowl.com.au>
>> >To: <socialcredit@elistas.com>
>> >Sent: Thursday, August 09, 2007 9:17 PM
>> >Subject: Re: [socialcredit] U.S. Economics Test
>> >
>> >
>> >>The "right" answer Keith, is that none of the
>> >>options provided is correct.
>> >>John Hermann
>> >>
>> >>>KEITH WILDE wrote:
>> >>>Are you going to keep us guessing about the
>> "right" answer?
>> >>>Keith
>> >>>>From: <william_b_ryan@yahoo.com>
>> >>>>Reply-To: socialcredit@elistas.com
>> >>>>To: socialcredit@elistas.com
>> >>>>Subject: [socialcredit] U.S. Economics Test
>> >>>>Date: Thu, 9 Aug 2007 08:17:59 -0700 (PDT) The
>> graphic accompanying the
>> >>>>article in The New York
>> >>>>Times, which I've attached below, contains this
>> sample
>> >>>>question: "What happens to most of the money
>> deposited in
>> >>>>checking accounts at a commercial bank? "A. It
>> is used to pay the bank's
>> >>>>expenses. "B. It is loaned to other bank
>> customers. "C. It is kept in
>> >>>>the bank's vault until depositors
>> >>>>withdraw the funds. "D. It is paid to owners of
>> the bank as return on
>> >>>>their investment."
>
>
>
>
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