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|Subject:||Re: [socialcredit] Re: [chdouglas] Re: I await your answers to my questions (was: Re: Public-spirited Banking (was: Re: The Abolition of Interest on Loans))|
|Date:||Saturday, March 22, 2008 14:54:14 (+1300)|
|From:||William Hugh McGunnigle <wmcgunn @.........nz>
Hi Peter and Ardeshir
Your arguments appear to be going around in circles.
In particular political systems have nothing to do with the control of the
money supply unless they are prepared to actually control the quantity of
money (finance) in circulation. Double accounting is perhaps an essentail
tool to ensuring that modern accountancy ensures that all enterprises work
at a "profit", but it is also a tremendous tool for concealing losses and
embezzlement from company servants and shareholders. I am still to be
convinced that the tool was not invented for this purpose in the first place
by an enterprising "accountant", specifically constructed to create a
mystique about simple book-keeping of accounts to confuse others.
Be that as it may, the basic problem of the modern "post-industrial"
society in the west is that the finance available to the consumers in
society does not match the finance absorbed by manufacturers producing the
the articles needed for a modern civilization. The present system can only
bridge this gap by increasing the amount of overall indeptedness for
everyone. An ever decreasing minority become dept free during their
lifetime, but the remainder of the world's population become ever more
indepted to the system. Because the creation of "money" ie financial credit
lies basically in the hands of private multinational banking monopolies the
manipulation of the "money supply" is always directed to benefit those
monopolies. The recent actions of the Federal Reserve with respect to the
collapse of the Berstein banking group is proof of this. Effectively the
Federal Reserve bailed the Bank out until it could be absorbed by another
banking group at a bargain basement price.
Governments are dictated to by the Banking system through the IMF and
World Bank. Only governments that have be fortunate or canny enough to avoid
indeptedness to those orgnisations have genuine control over their destiny.
The greatest example of this is the USA whose government has been forced
into making every effort to control the flow of oil in the world in order to
protect the viability of the US dollar as a "reserve currency" used for the
purchase and transactions of world oil supplies. The wider needs of the US
people with respect to industrial output etc have been grossly ignored
resulting in a deskilling and deindustrialisation of the US economy with
consequent reduction in the gross incomes of most US citizens.
Under the present system the quantity of indeptness has to increase in
order to maintain the expansion of industrial output necessary to match the
needs of an increasing world population. Only some system that can supply
debt free finance can overcome the problem. Our problem is to convince world
leaders that this is the only sensible and most profitable way go forward.
Our present system is a dead end towards the collapse of civilisation and
the world economy as we know it. Both of you recognise this basic axiom, now
we need to find a way to propagate it to the general population.
----- Original Message -----
From: "Peter Hogwood" <email@example.com>
To: <firstname.lastname@example.org>; <email@example.com>
Sent: Saturday, March 22, 2008 4:40 AM
Subject: [socialcredit] Re: [chdouglas] Re: I await your answers to my
questions (was: Re: Public-spirited Banking (was: Re: The Abolition of
Interest on Loans))
> But this reply of yours does not respond to what I had
> asked. I had asked, in effect, why cannot profit be
> calculated in a non-creditary system? I proved that it
> CAN be.
> You did not answer the question I had asked, while I
> demonstrated that what you claimed - namely that
> profit cannot be calculated in a non-creditary system
> - was false. Please answer the question I had asked!
> [Reply] No, you didn't prove that. You gave a single
> isolated example of where a chariot that cost ten
> denarii to produce was sold for twelve denarii.
> Isolated examples are always possible in exception to
> the general rule.
> Start with the assumption of a fixed number of gold
> coins that support the entire volume of trade and
> commerce. If the population is increasing and the
> number of firms and transactions are increasing, it
> has to be the case that, as a matter of statistics and
> averages, that each individual firm is always
> receiving back fewer gold coins than it is spending,
> that, again as a matter of statistics and averages,
> that each individual firm is booking continuously a
> loss by any conceivable system of accounting.
> You could imagine that there is a gold mining industry
> that is supplying gold coins to the community. It
> spends gold coins for goods and services from the
> remainder of the community, and loans gold coins to
> non-mining firms so they can conduct their business.
> It follows that trade and commerce would be limited to
> the number of gold coins that the mining industry
> could supply, regardless of the real needs of trade
> and commerce in an otherwise growing economy. The
> economy would be severely constrained by the
> limitations of finance.
>>> So what? Where exactly does the fractional reserve
> system - or anything like it - enter into your
> argument above?
>> [Reply]: Because fractional reserve banking allows
> the flux of "tickets" from firms through their
> spending to increase with the expanding needs of trade
> and commerce.
> Sure it does, but the same thing can be done without
> fractional reserve banking - by the government of a
> nation simply increasing the nation's money supply
> commensurate with the expanding needs of the nation's
> trade and commerce. Why should the BANKS, which are
> often multi-national, and are NOT answerable to the
> citizens of any nation, be allowed to increase the
> flux of these "tickets", as you call them? Why should
> not only a government answerable to the citizens be
> allowed to do that?
> [Reply] In our system all firms are, again
> statistically speaking, deficit spending in the
> normally growing economy, yet are booking a profit
> through the rules and conventions of double entry
> accounting, with accommodation by the banks. In your
> proposed alternative, only the government would be
> allowed to deficit spend, which was essentially the
> Soviet system. It was also a system where the
> calculation of profit was impossible, which directed
> production through elaborate Leontiefian-like
> input-output tables. Whereas ours is entrepreneurial
> driven, with informational feedback from final
> consumers through free markets.
> It says nothing about justices of the peace having
> jurisdiction over any other cases. (Or are you
> claiming it does? If so, where does it say anything
> like that?)
> If what the articles says is true, then Justice
> Mahoney had no jurisdiction over the case involving
> Jerome Daly.
> [Reply] The court did indeed have jurisdiction over
> the underlying matter brought by the bank. Mahoney
> went far beyond his jurisdiction in pontificating on
> federal law. The quotation from the Minnesota law
> library was not all inclusive but merely an excerpt.
> Appeal was brought on the grounds that Mahoney had
> exceeded his jurisdiction in his ruling and decree.
> Did you READ the page referenced to "Zurn v.
> Northwestern National Bank", at:
> ...? It says nothing about the case of the First
> National Bank of Montgomery Jerome Daly vs. Jerome
> Nor does the material referenced for "Daly v. Savage
> State Bank", which can be found at:
> ... mention anything about the First National Bank of
> Thus it is obviously deceptive, to say the very least,
> to claim that the case of First National Bank of
> Montgomery Jerome Daly vs. Jerome Daly were declared a
> [Reply] Again, you are obviously not a lawyer and
> know nothing about legal procedure. Daly was involved
> in several similar foreclosures in which he was
> involved either as a defendant or lawyer representing
> others, from Mahoney's court, that were grouped
> together by the appellate courts.
> "Ultimately, the decision of the justice of the peace
> court was nullified and Daly was subsequently
> Yes, I have heard this specious argument before, many
> times. It's still unconstitutional, though, isn't it,
> for anyone other than Congress to issue US money. The
> US Constitution says, "Congress shall have the power
> ... To coin Money, [and] regulate the Value thereof."
> Note the word "Money". The word is NOT "legal tender".
> [Reply] Notice that the constitution does not say
> EXCLUSIVE power. Please learn to read. And note that
> the Federal Reserve is a creature of Congressional
> legislation. Banks are licensed by state and federal
> If I were to issue money, in any form, even electronic
> form, and call that money "US dollars", I would be
> considered a counterfeiter, would I not? And I would
> be called a counterfeiter even if I were to back up
> every cent of the electronic money I issued with REAL
> money kept at my home, which anyone holding my
> electronic money could have on demand. Yet banks issue
> such electronic money every day! What's the difference
> between me and the bank, then?
> [Reply] One difference is that the banks are licensed
> by the state or federal governments to be in the
> business of banking. You are not.
> That is not altogether true. People aren't allowed to
> issue a nation's money without being called
> [Reply] People who are not licensed as banks might be
> called that.
> But by calling the money they issue "US dollars", the
> banks are CLEARLY engaged in counterfeiting ... or at
> the very least in a scam (i.e, a deception, a
> dishonest scheme and a fraud perpetrated upon the
> general public, who indeed are caused to believe that
> the money issued by the banks are US dollars).
> [Reply] You have clearly never read your deposit
> contract with your bank. Please point to even a
> single statement in that contract that is deceptive.
> Also, perhaps you never noticed that banks do not call
> their deposits "US dollars" but "dollars," which
> represent a general consensus as to value. I can
> create a limited form of money by tendering a
> promissory note denominated in dollars. It is limited
> in the sense that it is not as generally recognizable
> as are bank deposits, and therefore could not
> accommodate trade and commerce to the same extent.
> Peter Hogwood
> --- Ardeshir Mehta <firstname.lastname@example.org> wrote:
>> On 21-Mar-08, at 2:29 AM, Peter Hogwood wrote:
>> > Ardeshir, my replies are inserted [Reply] below:-
>> >>> It has to do with accounting and numbers. The
>> >>> question is how could profit be calculated in a
>> >>> system? It can't be in a non-creditary system,
>> which is the point.
>> >> Why ever not?
>> >> Suppose there were only gold coins in
>> circulation, and no bank
>> >> notes at all, like in Roman times. A manufacturer
>> of, say,
>> >> chariots could use gold coins to buy everything
>> he needs: his
>> >> lumber, his hardware (axles, nails, and so on),
>> the firewood for
>> >> his fires, his tools, etc.. Suppose he makes
>> chariots and sells
>> >> them. Suppose it costs him ten denarii per
>> chariot to buy
>> >> everything he needs to make the chariots, and he
>> is able to sell
>> >> each chariot for twelve denarii. Then his profit
>> would be
>> >> calculated as being two denarii per chariot,
>> wouldn't it?
>> >> If not, why not? ( Note that no credit is
>> involved in this
>> >> calculation. )
>> >>> A commodity-like money operating in accordance
>> to the quantity
>> >>> theory just wouldn't work. There is no possible
>> way for profit
>> >>> and loss to be accurately calculated in such a
>> >> Why not, given the example I just gave above?
>> > [Reply]: Gold is in relatively fixed quantity. A
>> commodity money
>> > based on gold could not expand to accommodate
>> increasing trade.
>> > With increasing transactions involving more and
>> more people and
>> > firms, as a statistical matter individual firms
>> could not possibly
>> > be receiving back in reflux to their spending more
>> than they are
>> > spending, because their spending is accumulating
>> into more and more
>> > balances which are in subtrahend to system flow.
>> The reflux to
>> > individual firms in sales would always be falling
>> in respect to
>> > their spending, an impossible condition involving
>> perpetual loss in
>> > terms of any conceivable system of accounting. The
>> > civilization was precluded from developing a mass
>> > economy because double entry accounting had yet to
>> be invented, and
>> > creditary instutions like modern banks that
>> accommodate expanding
>> > trade could therefore not exist. For this reason
>> Roman civilization
>> > was doomed to subsist on slavery and plunder.
>> But this reply of yours does not respond to what I
>> had asked. I had
>> asked, in effect, why cannot profit be calculated in
>> a non-creditary
>> system? I proved that it CAN be.
>> You did not answer the question I had asked, while I
>> that what you claimed - namely that profit cannot be
>> calculated in a
>> non-creditary system - was false. Please answer the
>> question I had
>> >>> Basic model of the modern economy:
>> >>> Firms pay out, in return for goods and services
>> >>> generally recognizable creditary instruments, or
>> "tickets," which
>> >>> they redeem over their sales counters for
>> produced goods and
>> >>> services. Inasmuch as tickets printed by the
>> individual firms
>> >>> themselves would not be generally recognizable,
>> and therefore
>> >>> would not be tradeable, banks accommodate the
>> process by
>> >>> exchanging their generally recognizable
>> "tickets" in the form of
>> >>> deposits for the individual "tickets" of the
>> firms, a service for
>> >>> which they charge a fee called interest,
>> inasmuch as it is a
>> >>> function of time. These "tickets" are contracts
>> involving credit
>> >>> and debt, pure and simple.
>> >> So what? Where exactly does the fractional
>> reserve system - or
>> >> anything like it - enter into your argument
>> > [Reply]: Because fractional reserve banking allows
>> the flux of
>> > "tickets" from firms through their spending to
>> increase with the
>> > expanding needs of trade and commerce.
>> Sure it does, but the same thing can be done without
>> reserve banking - by the government of a nation
>> simply increasing the
>> nation's money supply commensurate with the
>> expanding needs of the
>> nation's trade and commerce. Why should the BANKS,
>> which are often
>> multi-national, and are NOT answerable to the
>> citizens of any nation,
>> be allowed to increase the flux of these "tickets",
>> as you call them?
>> Why should not only a government answerable to the
>> citizens be
>> allowed to do that?
>> >> Is it conceivable to you that the bank was
>> seeking possession of a
>> >> house worth less than $100? If the house was
>> worth more, then a
>> >> Justice of the Peace would, according to the
>> first-quoted passage,
>> >> have no jurisdiction over the case.
>> > [Reply]: You are clearly not a lawyer and know
>> nothing about the
>> > law. I would even question your your ability to
>> read a simple
>> > declarative sentence.
>> What evidence do you have for making such
>> > The $100 limitation has to do with civil disputes
>> between parties
>> > involving monetary claims, or minor criminal
>> matters. JPs are
>> > involved in approving various writs and warrants
>> that do not
>> > involve monetary claims. The claim in this case
>> was not for money
>> > but foreclosure and the sheriff's sale of
>> collateral, something
>> > apparently handled by JP courts in Minnesota.
>> The article you quoted says,
>> The 1967/1968 Minnesota Legislative Manual states:
>> "Justices of the peace are elected for two-year
>> terms in townships
>> and in cities and villages which do not have
>> municipal courts.
>> Justices of the peace have jurisdiction over actions
>> arising within a
>> county when the amount involved does not exceed $100
>> for civil cases,
>> and when the punishment or fine does not exceed $100
>> or three months'
>> imprisonment in criminal cases."
>> [END QUOTE]
>> It says nothing about justices of the peace having
>> jurisdiction over
>> any other cases. (Or are you claiming it does? If
>> so, where does it
>> say anything like that?)
>> If what the articles says is true, then Justice
>> Mahoney had no
> === message truncated ===
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