| Subject: | [socialcredit] Re: [GJM] Replying to Peter Challen | | Date: | Thursday, January 17, 2008 19:36:52 (-0800) | | From: | Myro Ashenopolitus <new_economics @.....com>
|
Rodney, my replies are inserted below:
-------------------------------------------------
Dear Ashenopolitus,
It is always a pleasure to correspond with educated,
open-minded and expert people like your good self.
1. Where is the whopper when I say the banking system
creates money out of nothing and you say exactly the
same?
[Reply: The fact that banks create money out of
nothing was not one of your whoppers that I cited. But
I do object to the nefarious spin you put on the term.
"Out of nothing" derives from the Latinized legal
term, "ex nihilo," which means contractual in this
context. Modern creditary money is contractual,
calling for future performance. When we sit down to
write a contract, any contract, we will agree on terms
and conditions that did not exist before we sat down.
Hence, they were created "out of nothing" in the
finalized contract that we will sign.]
-
Does your education and open-mindedness include being
logical? Is Steven Consilio being unfair in
implicitly accusing you of Orwellian double-think (the
ability to hold two mutually exclusive ideas
simultaneously)?
2. Where is the whopper when I say that the banks do
not create enough money for the repayment of interest?
I am sure that you can explain where in the process
the banks create the money for the interest.
[Reply: That was explained in my original posting,
which I'll be glad to expand upon as much as you like.
The banks as a statistical matter create more than
enough money to pay interest back to them when they
write checks for any purpose whatsoever without
correspondingly debiting any bank customer's account.
Those checks are deposited into transaction accounts
that are liabilities of the banks, as is exactly the
case when they extend the principal of loans. This
process is not a mystery and is acknowledged by the
economics profession.]
-
3. Please display your expertise further in
explaining your statement that, when interest is
repaid, it is cancelled.
[Reply: Because when interest is paid to the banks,
deposit accounts held by the public are debited,
without any corresponding credit to any accounts held
by the public. The deposit accounts are liabilities
of the banks to the public, which are reduced when
payments are made to them for interest or any other
purpose. The sum total of bank deposits held by the
non-bank public are thereby reduced, reducing the
quantity of money as generally defined.]
-
4. Please also explain how banks pay their employees
etc if the interest the banks receive is cancelled.
[Reply: By writing checks, which are their
liabilities. When those checks are deposited into
bank accounts, the sum total of bank deposits thereby
increase, increasing the quantity of money as
generally defined. It's all handled by the ordinary
rules and conventions of double entry accounting. Let
me also comment on another point you made in the
program, that two things are paid to the banks in
addition to principal: administrative charge plus
interest. Actually, the administrative charge is in
fact interest, inasmuch as interest is defined, in the
standard definition, as the amount paid to the banks
in addition to principal, regardless how it is
calculated. The three components of interest are a)
ordinary business expense, what you call
administrative charge; b) what is effect an insurance
premium to cover defaulted loans, which varies by
credit risk category; and c) profit for the financial
services that banks supply. By far the largest amount
collected through interest by the banks is the
insurance premium, the next largest is business
expense, and the smallest is the banks' profit.]
-
5. I am fascinated by your comments on riba/interest
and the Qu'ran. I have contact with many Islamic
scholars and the consensus is undoubtedly that
interest is riba and that in ancient usage 'usury'
generally refers to riba.
[Reply: The "consensus" is from the Islamic
fundamentalists you are conferring with. The
reformist Muslims are following the path of the
Christian reformists of five centuries ago, who are
going back to the original scriptures and language,
who are finding that in regard to their moral precepts
the Islamic scriptures are in close agreement with the
Christian scriptures. Distortions in both
Christianity and Islam, it appears, were made by
closed minded and rather ignorant medieval
interpreters, who put their own spin in distorting the
word of God. In my earlier post I gave you a citation
from one American reformist Muslim Internet site.]
-
The modern usage of the word 'usury' (meaning
'excessive interest') is another matter.
[Reply: It is however more in conformity to the
original meaning of the scriptures in both
Christianity and Islam.]
-
6. I am also completely fascinated by who you are and
what interests you are (attempting) to represent.
[Reply: I am amused by the conspiracy theories implied
by the other posts, from Chris, Steve and others,
which failed to address even a single point I made in
my original post, as if they didn't matter. The
propensity toward conspiracy theory seems to be a
characteristic of the "crank" mindset. As to Bill
Ryan, I am not Bill Ryan. I am a graduate student. I
do know him very well, and see him almost every day,
as he is my thesis adviser, as well as being employed
by him as a research assistant. My involvement in
these discussions is part of my assigned research
project.]
-
Rodney Shakespeare
-
Sincerely, Myro
--- Rodney Shakespeare
<rodney.shakespeare1@btinternet.com> wrote:
Dear Ashenopolitus,
It is always a pleasure to correspond with educated,
open-minded and expert people like your good self.
1. Where is the whopper when I say the banking
system creates money out of nothing and you say
exactly the same? Does your education and
open-mindedness include being logical? Is Steven
Consilio being unfair in implictly accusing you of
Orwellian double-think
(the ability to hold two mutually exclusive ideas
simultaneously)?
2. Where is the whopper when I say that the banks do
not create enough money for the repayment of interest?
I am sure that you can explain where in the process
the banks create the money for the interest.
3. Please display your expertise further in
explaining your statement that, when interest is
repaid, it is cancelled.
4. Please also explain how banks pay their employees
etc if the interest the banks receive is cancelled.
5. I am fascinated by your comments on riba/interest
and the Qu'ran. I have contact with many Islamic
scholars and the consensus is undoubtedly that
interest is riba and that in ancient usage 'usury'
generally refers to riba. The modern usage of the
word 'usury' (meaning 'excessive interest') is another
matter.
6. I am also completely fascinated by who you are and
what interests you are (attempting) to represent.
Rodney Shakespeare
----- Original Message -----
From: "Myro Ashenopolitus" <new_economics@yahoo.com>
To: <discussion@globaljusticemovement.net>
Sent: Tuesday, January 15, 2008 4:40 PM
Subject: [GJM] Replying to Peter Challen
Unfortunately, Peter, there are some whoppers from
both Shakespeare and Yaseen in the first half of the
program that will turn off educated and open minded
people to the proposed solutions.
For example, Shakespeare's assertion that "one of the
problems of creating out of nothing is that it creates
enough money for the principal of the loan but not
enough for the interest."
And Yaseen's assertion that "the Quran condemns
categorically usury, or interest."
First, to address Shakespeare's assertion:
We say that banks create money because they credit
deposit accounts when they create loans. The ability
and propensity to transfer deposit balances from
person to person in transactions is what makes deposit
accounts effectively money in today's economy. So,
when loans are granted, money is being created. And,
when loans are repaid, together with interest, money
is being canceled.
But there is a reciprocal monetary flow from the banks
when they make payments for ordinary business
expenses, salaries and wages to their employees,
dividends to their stockholders, etc., where they also
credit deposit account balances, which is additional
to loans in the creation of money. This puts money
into circulation not deriving from loans that is
available to pay interest to the banks in payment for
financial services rendered.
Now, to Yaseen's assertion:
The ancient scriptures originally written in Semitic
languages used two words that were erroneously
translated or interpreted as "usury."
A modern Islamic scholar in the United States writes
this:
http://www.submission.org/islam/interest-usury.html
"The Quran forbids usury, not interest. Quite a few
states in USA have laws against usury. Usury is
defined as excessive interest. A Dictionary defines
usury as 'an excessive or inordinate premium for the
use of money borrowed', 'extortionate interest', or
'the practice of taking exorbitant or excessive
interest.' The Arabic language also makes distinction
between interest (Fa'eda) and usury (Reba). The Quran
forbids Reba or usury."
Which is perfectly consistent with the modern Jewish
and Christian perspectives on the matter:
http://eh.net/encyclopedia/article/jones.usury
"John Calvin's letter on usury of 1545 made it clear
that when Christ said 'lend hoping for nothing in
return,' He meant that we should help the poor freely.
Following the rule of equity, we should judge people
by their circumstances, not by legal definitions.
Humanist that he was, Calvin knew there were two
Hebrew words translated as 'usury.' One, neshek, meant
'to bite'; the other, tarbit, meant 'to take
legitimate increase.' Based on these distinctions,
Calvin argued that only 'biting' loans were forbidden.
Thus, one could lend at interest to business people
who would make a profit using the money. To the
working poor one could lend without interest, but
expect the loan to be repaid. To the impoverished one
should give without expecting repayment."
-
Myro
---------------original message-----------------
Date: Thu, 10 Jan 2008 17:23:12 +0000 From: "Peter
Challen" <peterchallen@googlemail.com> To:
discussion@globaljusticemovement.net Subject: Re:
[GJM] An excellent programme
I've reached the half-way stage of the programme
recommended below and use the 'break' to add my
recommendation to this sanguine critique of a complex
situation - a remarkable bit of broadcasting.
Peter
On 10/01/2008, Rodney Shakespeare
<rodney.shakespeare1@btinternet.com> wrote:
Dear All.
Alright, I know I should not say this (because I am
one of the speakers with Moeen Yaseen of
Globalvision2000) but Global Money Crisis: Just Where
Does the Buck Stop? is an excellent programme. Moeen
is tremendous!!
At last we have managed to put across on television
some analysis of what is wrong with the global economy
=== message truncated ===
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