|Subject:||[socialcredit] Re: [GJM] Shakespeare's theory|
|Date:||Wednesday, March 26, 2008 07:57:22 (-0700)|
|From:||Peter Hogwood <p_t_hogwood @.....com>
"...you are saying that the bank is simply creating
out of nothing money (normally called 'printed money'
or some such) which is not repayable. It is simply
printing money for itself. Do you really mean that?
It's bad enough that the banks create increasing
amounts of repayable interest-bearing money. But you
are clearly saying that they also create large amounts
of non-repayable money (for their own benefit). If I
did that I would be called a forger. "
[Reply]: The banks are not committing forgery because
they are crediting their own liability accounts, their
customer deposit accounts, when they pay expenses and
dividends, which they may do by the rules of double
entry accounting. The corresponding debits are to
certain designated "equity" or "capital" accounts
within the banks, reducing the banks' net worth. The
banks are losing money unless there is offsetting
income, as with any business.
"And what on earth do you mean by talking about
reciprocal economic activity? Where is the reciprocity
when one of the parties (the bank) is simply forging
[Reply]: The banks have the legal right and
capability to credit their own liability accounts, so
it's not forgery. Their liability accounts in the
form of customer deposits function as money in today's
economy. The reciprocity is in the fact that the
banks are purchasing goods and services from the more
general community and the more general community is
purchasing financial services from the banks.
"3. You then state that, as a statistical matter,
firms are always disbursing more than they are
receiving back through sales, yet they are always
booking a profit.
"This statement only makes sense if you say that firms
are able to disburse more than they receive back
through sales because they are borrowing money with
which to do it. So why didn't you say this?"
[Reply]: Firms deficit spend in a growing economy
with accommodation by the banks.
"You then show your gobbledy-gook diagram (which does
not show what is on the y axis) and I presume it is
the Ryan/Hogwood inversion of Douglas's A+ B theorem.
Am I right or wrong?"
[Reply]: Time is the x axis, nominal monetary values
are the y axis. It is the macroeconomic accounting
model as developed in the Scottish accounting debating
societies during the latter half of the nineteenth
century. The elaboration of the A + B theorem is
predicated on an extension of this model. See:
"5. And you finish with a piece of weirdo
goobledy-gook:- " Since the banks are banks,
accommodation by the banks is not necessary for the
"Is this what Rice University taught you?"
[Reply]: Let me rephrase it slightly: The banks
don't have to have accommodation from the banks, as
with other firms, because they are the banks. They
accommodate their own deficit spending. Ordinary
firms require accommodation because their individual
promissory notes are not generally recognized.
My major at Rice was accounting, and I had and
continue to have conversations with Bill Ryan, who is
an accounting historian. I am professionally employed
as an accountant.
--- Rodney Shakespeare
> Is this mixture of the banal, the incredible and
> the unintelligible the
> sort of thing you and Ryan get up to at
> email@example.com? Is this
> your version of Social Credit?
> 1. Yes, the figures in bank accounts are money
> which can be spent (even
> though you may have to repay it to the bank).
> Yes, when a bank loans you money it puts money into
> your bank account. (But
> this money is money which must be repaid -- a point
> which seems to have
> slipped your mind).
> Yes, the figures in your bank account can also rise
> because you or other
> people put money into it. (For Heaven's sake, I can
> scarcely believe I am
> writing this)
> And, yes, the bank all the time creates the money,
> repayable money, which it
> puts into the bank accounts.
> 2. At which point your arms start windmilling and
> you run off into Raving
> Lunatic Land and, needless to say, you completely
> fail to answer the
> question I previously asked.
> Yes, the banks put money, repayable money, into bank
> accounts like mine.
> But when they pay salaries into the accounts of
> their employees, the money
> is NOT repayable -- it is a debt-free in respect of
> the employee and the
> question is where did the bank get that money from?
> It would have been
> consistent with your previous responses for you to
> say this money came from
> the interest/income of the bank. But you definitely
> seem to be not saying
> Instead you are saying that the bank is simply
> creating out of nothing money
> (normally called 'printed money' or some such) which
> is not repayable. It
> is simply printing money for itself. Do you really
> mean that? It's bad
> enough that the banks create increasing amounts of
> interest-bearing money. But you are clearly saying
> that they also create
> large amounts of non-repayable money (for their own
> benefit). If I did that
> I would be called a forger.
> Is there any school of thought which agrees with
> what you are saying?
> Indeed, are there any other Social Crediters who
> And what on earth do you mean by talking about
> reciprocal economic activity?
> Where is the reciprocity when one of the parties
> (the bank) is simply
> forging money?
> 3. You then state that, as a statistical matter,
> firms are always
> disbursing more than they are receiving back through
> sales, yet they are
> always booking a profit.
> This statement only makes sense if you say that
> firms are able to disburse
> more than they receive back through sales because
> they are borrowing money
> with which to do it. So why didn't you say this?
> Why don't you have the
> good manners to be clear when there is no problem in
> being clear?
> You then show your gobbledy-gook diagram (which does
> not show what is on the
> y axis) and I presume it is the Ryan/Hogwood
> inversion of Douglas's A+ B
> theorem. Am I right or wrong?
> 4. You then write this:-
> "This is done through accommodation by the banks,
> whose primary function in
> this system is to exchange their generally
> recognizable promissory notes in
> the form of deposits for the poorly recognized
> individual notes of their
> borrowers, making the competitive market in mass
> production possible."
> If you mean the banks lend money, why not say just
> 5. And you finish with a piece of weirdo
> " Since the banks are banks, accommodation by the
> banks is not necessary for
> the banks."
> Is this what Rice University taught you?
> Rodney Shakespeare.
> ----- Original Message -----
> From: "Peter Hogwood" <firstname.lastname@example.org>
> To: <email@example.com>;
> Sent: Tuesday, March 25, 2008 3:05 PM
> Subject: Re: Shakespeare's theory
> > Rodney, the concept is very simple and is in full
> > accord with the principles of double entry
> > Inasmuch as most transactions in today's economy
> > conducted through the tender of bank deposits, we
> > define bank deposits as being money. It is a
> > colloquial term since there are many definitions
> > money.
> > The theorem is that loans create deposits, which
> > not mean that deposits derive only from loans.
> > banks net credit deposit accounts for any purpose,
> > loans or whatever, money in the hands of the
> public is
> > therefore being created. The accounts are
> > of the banks, which are credited not only when
> > grant loans, but when banks write checks or their
> > electronic equivalent for ordinary business
> > also when banks write checks for dividends to
> > stockholders, which makes it possible for the more
> > general community to pay interest to the banks.
> It is
> > reciprocal economic activity in which the banks
> > an essential role.
> > As a statistical matter, in terms of cash flow in
> > growing economy, firms are always disbursing more
> > they are receiving back through sales, yet are
> > continually booking a profit. See the diagram at
> > This is done through accommodation by the banks,
> > primary function in this system is to exchange
> > generally recognizable promissory notes in the
> form of
> > deposits for the poorly recognized individual
> notes of
> > their borrowers, making the competitive market in
> > production possible.
> > Since the banks are banks, accommodation by the
> > is not necessary for the banks.
> > Peter
> > --- Rodney Shakespeare
> > <firstname.lastname@example.org> wrote:
> >> Peter,
> >> Your response is an amazing development. You have
> >> flabbergasted me -- knocked me clean off my
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