| Subject: | Re: [socialcredit] In Reply to Per Almgren | | Date: | Saturday, July 21, 2007 00:34:16 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
| In reply to: | Message 4934 (written by William Hugh McGunnigle) |
Per, I apologise for my good friend and associate's version of your name.
He's got to be a good Kiwi because he's a well-versed monetary reformer, but he
suffers from originating in that land where they haven't been able to spell
either their place names or their own for centuries. Marshbanks spelled
Marjoriesbanks, Choomley, Cholmondley, and Smythe for Smif. I ask you! And
he's a chemist by profession, if that provides a clue to his slip.
Having got that, I hope you read on to his message, with which I must agree
strongly.
Regards. John R.
From: "William Hugh McGunnigle" <wmcgunn@maxnet.co.nz>
Reply-To:
socialcredit@elistas.com
To: <socialcredit@elistas.com>
Subject: Re:
[socialcredit] In Reply to Per Almgren
Date: Fri, 20 Jul 2007 15:35:11
+1200
>Reply supplementing Bill"s answer to Per amalgam
> Bill is telling you
that the double accounting system is
>designed to cover an apparent deficit in
the money supply that is
>created during an expansion period in the economy. I
will not argue
>about the morality of the practice, but state simply that it is
>designed to account for or conceal ( I have still to decide which
>one it is)
for the increasing debt burden being imposed upon the
>world's financial system
by out moded financial practices designed
>in the 16th century. Basically today
we are attempting to
run a 21st
>century economy using financial tools that are 5 centuries out of
>date. It is like trying to control a sophisticated modern jumbo jet
>using the
control mechnisms appropriate to the machines of World War
>One. The whole
system is unstable and the larger it becomes the more
>likely it is that it will
collapse simply because those controlling
>it have no inclination to prevent
that collapse. We have learned
>nothing from the financial disaster from
1929-1934.
> It is not a question of 10 not being able to pay back 11, but a
>question of whether we continue accepting a system that requires
>increasing indeptedness in order to ensure that human progress and
>developement can continue. Social Credit has simply analysed a
>financial
problem and offered a possible method of reducing or
>preventing this deptor economy. The rapidity of the money flow
>ironically
conceals much of the indeptedness crisis because a great
>deal of the present
money flow is simply ledger entries transferring
>debts from one place to
another. Have a close look at the material
>that Bill has supplied and you will
find that this will confirm that
>axiom. Our problem, as monetary reformers, is
to develope a fresh
>system to overcome the increasing indeptedness inherent to
the
>present system. Social Credit offers a viable and sustainable
>alternative.
> regards
> Bill McGunnigle
>
>----- Original Message -----
From: <william_b_ryan@yahoo.com>
>To: <socialcredit@elistas.com>
>Sent: Friday,
July 20, 2007 4:28 AM
>Subject: [socialcredit] In Reply to Per
Almgren
>
>
>>Replying to Per Almgren's post of July 8.
>>
>>"Can you explain,
in detail, how this extra 1 is spent
>>into circulation without creating a
corresponding
>>debt?"
>>-----------------------------
>>------------------------------
>>
>>There
is a credit for every debit, and a debit for
>>every credit. In the example, the
banks spend 1 into
>>circulation in payment salaries, wages, dividends,
>>plus
ordinary business expenses. It is available in
>>the community for payment of
interest plus other fees
>>back to the banks for services rendered.
>>-
>>
>>"If
the borrowers' debt accounts are 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..."
>>-----------------------------
>>------------------------------
>>
>>The
borrowers' accounts are not charged daily but only
>>as their individual loan
contracts stipulate.
>>-
>>
>>"...but they themselves are not entitled to use
that
>>money at the corresponding credit
accounts..."
>>-----------------------------
>>------------------------------
>>
>>Perhaps
I'm not following you here. They are free to
>>use the positive balances in their
transaction
>>accounts, whatever they might be.
>>-
>>
>>"...doesn't that mean
that the bank is borrowing
>>interest-free from the credit accounts until
the
>>borrowers actually pay their accrued
interest
>>amounts?"
>>-----------------------------
>>------------------------------
>>
>>Not
interest free because there is a real cost to
>>supplying financial services,
even to themselves. The
>>real cost is for salaries, wages and
resources
>>utilized in providing the service.
>>-
>>
>>"And what happens if the
bank doesn't completely use
>>the interest for payment of
expenses?"
>>-----------------------------
>>------------------------------
>>
>>This
is what I call the bankers' underconsumption
>>hypothesis, which I began to
address in my posting
>>yesterday, entitled, "10 can't pay 11, RIP."
Please
>>read it. The answer requires a dynamic perspective of
>>the economic
process. The simple answer is that
your
>>question is based on a false premise. In a steady
>>state economy
entrepreneurs are always spending
>>exactly what they are receiving back in
reflux. In an
>>expanding economy they are always spending more than
>>they are
receiving back, yet are recording a profit in
>>their double entry
accounts.
>>
>>This holds true for bankers as with any classification
>>of
entrepreneurs.
>>-
>>
>>"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."
>>-----------------------------
>>------------------------------
>>
>>You
simply do not understand how double entry accrual
>>accounting
works. Look again at the flux-reflux
>>diagram appended below and archived
at
>>http://www.geocities.com/new_economics/flux-reflux.gif
>>
>>Please note that
in an expanding economy spending
>>always leads its reflux. Again, this holds
true for
>>bankers as with any classification of entrepreneurs.
>>It is not
possible for the continuing increment of
>>increase in the rising flux curve to
be funded by
>>"sales" or "saving" from income, but by the financial
>>sector's
ability to increase fungible credit in
>>support of the entrepreneur. The
totality of spending
>>is funded by what is tantamount to a revolving
fund,
>>plus the incremental increase accommodated by credit.
>>Please see the
"stream of increasing spending"
>>description in my post of July 16.
Also, look at the
>>second diagram appended below, archived
at
>>http://www.geocities.com/new_economics/accounting_profit.gif
>>
>>
>>--------------original
message-------------
>>
>>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
>>
>>
>>
>>____________________________________________________________________________________Ready
>>for the edge of your seat?
>>Check out tonight's
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>>
>>---------------------------------------------------------------------
>>Some
introductory materials to the discussion topic of this list
>>are
at
>>http://www.geocities.com/socredus/compendium
>>You're subscribed to this
list with the email wmcgunn@maxnet.co.nz
>>For more information, visit
>>http://www.eListas.com/list/socialcredit
>>
>
>
>---------------------------------------------------------------------
>Some
introductory materials to the discussion topic of this list are
>at
>http://www.geocities.com/socredus/compendium
>You're subscribed to this
list with the email
>johngrawson@hotmail.com
>For more information, visit
http://www.eListas.com/list/socialcredit
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