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Message 5472
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| Subject: | Re: [socialcredit] the non-neutrality of money | | Date: | Saturday, July 26, 2008 21:12:41 (-0600) | | From: | Martin Hattersley <jmartinh @....ca>
|
When I worked on research in Ottawa, I spent a good deal of time analyzing
the connection between cash flows in the economy and changes in the price
index, and I satisfied myself that there was a definite connection between
the two, which could be demonstrated by an examination of the statistics
over a period of more than 55 years.
I attach the relevant part of my brief to the Macdonald Royal Commission in
that regard, and if anyone wishes to punch holes in it, please feel free to
express your opinions.
Martin Hattersley, 5929-189 St.,
EDMONTON AB CANADA T6M 2J1
Phone (780) 483-5442
e-mail <jmartinh@shaw.ca>
----- Original Message -----
From: "John G Rawson" <johngrawson@hotmail.com>
To: <socialcredit@elistas.com>
Sent: Saturday, July 26, 2008 4:50 PM
Subject: RE: [socialcredit] the non-neutrality of money
I sugggest this argument needs to go back and resolve the definition of
inflation, because it has assumed that it is necessarily caused by increase
of the money supply.
Inflation these days is determined by measuring increased prices, with no
reference whatever to the money supply. Therefore its only practical
definition can be "Rising prices".
Orthodox economists recognise both demand-pull inflation caused by undue
increase in purchasing power and cost-push inflation caused by, for example,
rising oil prices which may generate no immediate increase in retail buying
ability. A corollary of the A+B model is that cost-push inflation is endemic
to the system.
It is a pity to see Social Crediters "suckered into" the prime argument of
the finance industry against monetary reform, i.e. the supposed inflationary
effects of any change.
Regards.
John R.> Date: Sat, 26 Jul 2008 09:59:29 -0700> From:
william_b_ryan@yahoo.com> To: socialcredit@elistas.com> Subject:
[socialcredit] the non-neutrality of money> > "...from a financial point of
view, the money supply has been inflated, and the community as a whole has
therefore paid for the new capital through the loss in value of their
monetary holdings. While the capital is being created (say the many years
spent constructing a new oilsands plant), no new wealth is available for
consumers."> ---------------------------------------------------------> >
Quite obviously no new wealth is created by the particular plant until it is
completed and in production. But this statement of yours falsely assumes
that money is neutral, that the only thing an increasing money supply causes
is increasing prices. > > In reality, while the construction of the plant is
being financed with new credit, the rate of profit by other firms is
increasing with the increasing spending, inducing the increasing production
of real goods and services into final consumption. The problem of inflation
has more to do with the way new credit is introduced than the fact that it
is introduced.> > In Social Credit theory, the ratio of A is naturally
falling to B with labor displacement, so the ratio of A to A + B, the costs
of production in double entry accounting, is falling, causing a continual
long-term fall to the rate of profit, continually suppressing production in
terms of productive potential and real demand.> > The rate of investment is
A + B. If A + B is accommodated through new loans, the ratio of A to A + B
is increased (rather than decreased) if the flow of A + B is accelerating,
and therefore the rate of profit is increased, since A + B is expensed
against sales after a delay, while A refluxes into retail sales rather
quickly. So the stimulus of an increasing A takes effect before the
consequent expensing of an increasing A + B. But this stimulative effect
continues only so long as the flow of A + B is accelerating. This means that
prices are exponentially increasing eventually into hyperinflation, if not
stopped. But while it lasts the stimulating effect is very real, in terms of
real production and consumption. Look at Douglas's 1923 testimony in Ottawa
on the Austrian inflation.>
http://www.geocities.com/socredus/Douglas_1923_second_day_Part_3.txt>; > Far
less inflationary are the Social Credit dividend and retail discount
programs, where new credit is rationally introduced at the point of retail
rather than directly as loans for investment. In the Social Credit program,
more and more investment is financed from retained profits rather than
loans. Prices are therefore ameliorated rather than exacerbated.> > Some
statements from Douglas regarding the non-neutrality of money:> > "...the
true assets of banks collectively consist of the difference between the
total amount of legal tender, or Government money, which exists, and the
total amount of bank credit money, not only which does exist, but which
might exist, and which is kept out of existence by the fiat of the banking
executive."> Swanwick, 1924.>
http://geocities.com/socredus/compendium/swanwick1924.txt>; > "The business
of a modern and effective financial system is to issue credit to the
consumer, up to the limit of the productive capacity of the producer, so
that either the consumer's real demand is satiated, or the producers'
capacity is exhausted, whichever happens first."> Chapter X, *Credit-Power
and Democracy*, 1920.>
http://geocities.com/socredus/compendium/chapter10.txt>; > >
> --------------------------------------------------------------------->
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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Some introductory materials to the discussion topic of this list are at
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[MIME component not shown: Royal Commission Brief (3) - J_M_Hattersley.mht (message/rfc822)
]
| Subject: | Royal Commission Brief (3) - J.M.Hattersley | | Date: | Monday, April 28, 2008 10:42:13 (-0600) | | From: | <7>>
|
Royal Commission Brief (3) - J.M.Hattersley
APPENDIX "A"
STATISTICAL
The purpose of this Appendix is to give the statistical backing to maintain
certain points advanced in the text of this brief. These are:
- That the quantity of dollars in circulation is related in a reasonably
constant fashion to the amount of the Gross National Product. From this is
deduced the concept that the path of the "average dollar" through the various
sectors of the economy back to its original starting place is a measurable and
reasonably constant period of between four and seven months. This concept is
used as the basis for the proposal that the amount of the National Credit,
expressed as a dollar figure, is a precise and ascertainable amount.
- That the changes in the Consumer Price Index over time in Canada have
varied annually by a factor that reflects increases or decreases in the volume
of money in the hands of the Personal and Government sectors of the economy,
and decreases or increases in the volume of sales by the Business sector to
Persons and Governments.
The reason for the preparation of these tables is to justify, in a world
where economists' explanations of inflation are more numerous than the angels on
the proverbial pinhead, the old fashioned concept that inflation of prices is
indeed related to "too much money chasing too few goods", and thereby justify
the almost crudely simple proposals of this brief for control of inflation by
quantitative control of the monetary mass.
Figures for the quantity of business sales to governments and persons are
taken directly from items 24(a) and (b) of Table 11 on Page 44 of "National
Accounts, Income and Expenditure, 1926-1956", and continuation volumes. Figures
for money supply are an average of the "Monthly Average" series for Currency and
Notes in circulation plus Chartered Bank deposits (M3), supplied by the Bank of
Canada (Statistical Summary Supplement, 1950 and continuation volumes).
Determination of changes in the quantity of money held by persons and
governments has been based on the following reasoning:
Sector accounts show the flow of value from all the various
sectors of the economy to each other, and each sector has an equal balance of
value received and value spent. From these figures, totals of Gross National
Product and Gross National Expenditure are prepared.
We know, however, that these sectors are not in exact balance.
Specifically, if the volume of money (credit) in circulation increases or
decreases during a year, there will be an unexplained flow from the National
Savings Account to or from the Business Sector or the Personal and Government
sectors, or both.
In the case of this flow to the business sector, this is represented by an
item of "Residual Error". I am assuming that this is in fact not an error at
all, but an actual imbalance caused by the creation or withdrawal of new money
in the system, and its being held to a greater or lesser degree by the
Business Sector.
In the case of flow to the Personal and Government sectors, I note that the
figure for National Savings is actually a residual figure, which will
therefore mask with an error of its own any actual cash flows from increases
or decreases in the money supply coming into the hands of consumers and
government rather than business.
The figure assumed to come to these sectors is therefore the total amount
of new credit in circulation, plus or minus credit assumed to have passed into
the keeping of the Business sector as disclosed by figures for residual error.
As a commentary on this technique, I note that it implies that the National
Accounts figures for personal savings in recent years of monetary expansion
have been highly overstated. This, I believe, is true.
Predictions of Price Level changes are based on the formula: I2 = I1 x (S2 + M2 - M1 - RE2) / S2
Where I1 = Price Index, Year 1
I2 = Price Index, Year 2
S2 = Total Sales to Persons and Governments, Year 2
M1 = Average Currency outside Banks and Bank Deposits, Year 1
M2 = Average Currency outside Banks and Bank Deposits, Year 2
RE2 = Total residual error expressed as a cash flow from Savings to Business, Year 2.
Pearson correlation of the above tables (where -1 indicates inverse
correlation, 0 indicates no correlation, and +1 positive correlation) yields
correlations as follows:
Table I (relationship Money Supply to G.N.P.) +.98
Table II (predicted and actual variations in consumer price
index, unaveraged) +.52
Table III (predicted and actual Consumer Price Indices) +.97
Table IV (predicted and actual variations in consumer price
index: 3 year moving average) +.73
TABLE I - QUANTITY OF MONEY CIRCULATING IN CANADA 1926-1982 AS A
PERCENTAGE OF GROSS NATIONAL PRODUCT
(1) (2) (3) (4) (5)
AVERAGE GROSS (2) AS A PERIOD OF CIRCULATION (MONTHS)
YEAR MONEY NATIONAL PERCENT
SUPPLY PRODUCT OF (3) 0....1....2....3....4....5....6....7
(M3)
1926 2153 5152 41.7 **************************
1927 2283 5549 41.1 *************************
1928 2458 6046 40.6 *************************
1929 2498 6134 40.7 *************************
1930 2326 5728 40.6 *************************
1931 2270 4699 48.3 *****************************
1932 2113 3827 55.2 **********************************
1933 2098 3510 59.7 ************************************
1934 2129 3984 53.4 *********************************
1935 2249 4315 52.1 ********************************
1936 2395 4653 51.4 *******************************
1937 2557 5257 48.6 ******************************
1938 2617 5278 49.5 ******************************
1939 2798 5636 49.6 ******************************
1940 3009 6743 44.6 ***************************
1941 3361 8328 40.3 *************************
1942 3786 10327 36.6 **********************
1943 4583 11088 41.3 *************************
1944 5410 11850 45.6 ****************************
1945 6235 11835 52.6 ********************************
1946 6908 11850 58.2 ***********************************
1947 7222 13473 53.6 *********************************
1948 7600 15509 49 ******************************
1949 8265 16800 49.1 ******************************
1950 8763 18491 47.3 *****************************
1951 8759 21640 40.4 *************************
1952 9307 24588 37.8 ***********************
1953 9789 25833 37.8 ***********************
1954 9931 25918 38.3 ***********************
1955 10933 28528 38.3 ***********************
1956 11414 32058 35.6 **********************
1957 11489 33513 34.2 *********************
1958 12545 34777 36 **********************
1959 13210 36846 35.8 **********************
1960 13291 38359 34.6 *********************
1961 14165 39646 35.7 **********************
1962 15208 42927 35.4 **********************
1962 15981 45978 34.7 *********************
1964 17202 50280 34.2 *********************
1965 18996 55364 34.3 *********************
1966 20441 61828 33 ********************
1967 22874 66409 34.4 *********************
1968 25749 72586 35.4 **********************
1969 28492 79815 35.6 **********************
1970 30081 85685 35.1 **********************
1971 35156 94450 37.2 ***********************
1972 40947 105234 38.9 ************************
1973 47035 123560 38 ***********************
1974 55578 147528 37.6 ***********************
1975 66616 165343 40.2 *************************
1976 69985 191857 36.4 **********************
1977 87641 210149 41.6 *************************
1978 105296 232211 45.3 ****************************
1979 122951 264279 46.5 ****************************
1980 140606 296555 47.4 *****************************
1981 163183 339055 48.1 *****************************
1982 173149 356600 48.5 ******************************
AVERAGE GROSS (2) AS A PERIOD OF CIRCULATION (MONTHS)
YEAR MONEY NATIONAL PERCENT
SUPPLY PRODUCT OF (3) 0....1....2....3....4....5....6....7
(M3)
TABLE II - PREDICTED AND ACTUAL CONSUMER PRICE INDICES,
1926-1982
(1) (2) (3) (4) (5) (6) (7) (8)
AVERAGE SALES RESIDUAL PREDICTED PREDICTED ACTUAL ACTUAL
YEAR MONEY BY BUS- ERROR CP INDEX % CHANGE CP INDEX CHANGE
SUPPLY INESS (x2) 1949=100 IN CPI 1949=100 IN CPI
(M3)
1926 2153 3511 312 78.36 70.7
1927 2283 3883 104 83.08 6.03 69.8 -1.27
1928 2458 4306 82 88.04 5.97 70.4 .86
1929 2498 4651 -55 87.76 -.32 71.2 1.14
1930 2326 4475 -49 83.42 -4.94 70.4 -1.12
1931 2270 3904 -228 77.35 -7.27 70.4 .00
1932 2113 3296 -146 70.24 -9.19 64.2 -8.81
1933 2098 3011 -154 66.30 -5.61 59 -8.10
1934 2129 3219 -202 62.78 -5.31 56.6 -4.07
1935 2249 3393 -199 61.32 -2.33 57.5 1.59
1936 2395 3604 -142 61.38 .11 58.8 2.26
1937 2557 3950 -141 61.71 .53 60.5 2.89
1938 2617 3980 -77 61.45 -.43 61.5 1.65
1939 2798 4064 -57 63.32 3.05 61.2 -.49
1940 3009 4823 -197 63.51 .29 63.8 4.25
1941 3661 5698 -149 65.77 3.56 68.3 7.05
1942 3786 7703 -200 67.69 2.92 71.5 4.69
1943 4583 7687 -262 72.40 6.96 73.5 2.80
1944 5410 8054 -299 77.15 6.56 74.3 1.09
1945 6235 7908 -395 81.34 5.44 75.2 1.21
1946 6908 8398 -62 87.26 7.28 77.8 3.46
1947 7222 10705 29 90.06 3.20 85.3 9.64
1948 7600 11824 212 94.55 4.99 96.5 13.13
1949 8265 13087 90 100.00 5.77 100.0 3.63
1950 8763 14410 7 103.51 3.50 103.7 3.70
1951 8759 16668 410 106.03 2.44 113.5 9.45
1952 9307 18782 24 109.26 3.05 116.2 2.38
1953 9789 20005 -159 111.02 1.61 115.8 -.34
1954 9931 20759 105 112.35 1.19 117 1.04
1955 10933 22424 76 117.75 4.81 117 .00
1956 11414 24516 -259 118.81 .91 118.9 1.62
1957 11489 26065 -46 118.94 .11 122.6 3.11
1958 12545 27699 -359 121.94 2.52 125.8 2.61
1959 13210 29366 -454 122.81 .72 127.3 1.19
1960 13921 30760 -391 121.58 -1.01 128.5 .94
1961 14165 32136 -284 123.81 1.84 129.3 .62
1962 15208 34060 251 128.51 3.80 131 1.31
1963 15981 36207 78 131.53 2.35 133 1.53
1964 17202 38982 -101 135.31 2.87 134.7 1.28
1965 18996 42305 -411 139.73 3.27 137.4 2.00
1966 20441 46638 -364 142.97 2.32 141.9 3.28
1967 22784 51125 -66 149.59 4.63 146.8 3.45
1968 25749 56388 -20 157.17 5.06 152.9 4.16
1969 28492 61733 886 166.41 5.88 158.8 3.86
1970 30081 66957 -690 168.64 1.34 164.5 3.59
1971 35156 73984 -1782 176.15 4.45 168.4 2.37
1972 40947 82499 -380 187.70 6.56 175.1 3.98
1973 47035 94315 89 199.99 6.55 187.9 7.31
1974 55578 111204 1259 217.62 8.81 209.1 11.28
1975 66616 130375 600 237.05 8.93 231.1 10.52
1976 69985 149982 -1014 240.77 1.57 250 8.18
1977 87641 166939 -2530 262.58 9.06 270.2 8.08
1978 105296 184304 3 287.74 9.58 290.7 7.59
1979 122951 204372 1224 314.32 9.24 317.7 9.29
1980 140606 230211 2286 341.55 8.66 352 10.80
1981 163183 261882 2222 373.89 9.47 392.6 11.53
1982 173149 286994 186 387.12 3.54 435 10.80
(1) (2) (3) (4) (5) (6) (7) (8)
AVERAGE SALES RESIDUAL PREDICTED PREDICTED ACTUAL ACTUAL
YEAR MONEY BY BUS- ERROR CP INDEX % CHANGE CP INDEX CHANGE
SUPPLY INESS (x2) 1949=100 IN CPI 1949=100 IN CPI
(M3)
TABLE III - PREDICTED AND ACTUAL INDICES, 1926-1982
(1) (2) (3) (log scale) (4) (5)
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1926 78.36 ******
+++++ 70.7 1926
1927 83.08 *******
+++++ 69.8 1927
1928 88.04 ********
+++++ 70.4 1928
1929 87.76 ********
+++++ 71.2 1929
----
1930 83.42 ******* ----
---- +++++ 70.4 1930
----
1931 77.35 ******
+++++ 70.4 1931
1932 70.24 *****
++++ 64.2 1932
1933 66.30 ****
+++ 59 1933
1934 62.78 ***
++ 56.6 1934
1935 61.32 ***
++ 57.5 1935
1936 61.38 ***
+++ 58.8 1936
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1937 61.71 ***
+++ 60.5 1937
1938 61.45 ***
+++ 61.5 1938
1939 63.32 ****
++++ 63.8 1939
----
1940 63.51 **** (WAR & PRICE CONTROLS) ----
---- ++++ 63.8 1940
----
1941 65.77 ****
+++++ 68.3 1941
1942 67.69 ****
+++++ 71.5 1942
1943 72.4 *****
+++++ 73.5 1943
1944 77.15 ******
++++++ 74.3 1944
1945 81.34 *******
++++++ 75.2 1945
1946 87.26 ********
++++++ (END OF PRICE CONTROL) 77.8 1946
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1947 90.06 ********
+++++++ 85.3 1947
1948 94.55 *********
+++++++++ 96.5 1948
1949 100.00 **********
++++++++++ 100 1949
----
1950 103.51 ********** ----
---- ++++++++++ 103.7 1950
----
1951 106.03 **********
+++++++++++ 113.5 1951
1952 109.26 ***********
+++++++++++ 116.2 1952
1953 111.02 ***********
+++++++++++ 115.8 1953
1954 112.35 ***********
++++++++++++ 117 1954
1955 117.75 ************
++++++++++++ 117 1955
1956 118.81 ************
++++++++++++ 118.9 1956
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1957 118.94 ************
++++++++++++ 122.6 1957
1958 121.94 ************
++++++++++++ 125.8 1958
1959 122.81 ************
+++++++++++++ 127.3 1959
----
1960 121.58 ************ ----
---- +++++++++++++ 128.5 1960
----
1961 123.81 ************
+++++++++++++ 129.3 1961
1962 128.51 *************
+++++++++++++ 131 1962
1963 131.53 *************
+++++++++++++ 133 1963
1964 135.31 *************
+++++++++++++ 134.7 1964
1965 139.73 **************
++++++++++++++ 137.4 1965
1966 142.97 **************
++++++++++++++ 141.9 1966
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1967 149.59 ***************
+++++++++++++++ 146.8 1967
1968 157.17 ***************
+++++++++++++++ 152.9 1968
1969 166.41 ****************
++++++++++++++++ 158.8 1969
----
1970 168.64 **************** ----
---- ++++++++++++++++ 164.5 1970
----
1971 176.15 *****************
++++++++++++++++ 168.4 1971
1972 187.70 ******************
+++++++++++++++++ 175.1 1972
1973 199.99 *******************
++++++++++++++++++ 187.9 1973
1974 217.62 ********************
+++++++++++++++++++ 209.1 1974
1975 237.05 *********************
++++++++++++++++++++ 231.1 1975
1976 240.77 *********************
+++++++++++++++++++++ 250 1976
PREDICTED 1 2 5 ACTUAL
YEAR CP INDEX 5 0 0 0 CP INDEX YEAR
1949=100 0........0........0...........0 1949=100
(*) (+)
1977 262.58 **********************
++++++++++++++++++++++ 270.2 1977
1978 287.74 ***********************
+++++++++++++++++++++++ 290.7 1978
1979 314.32 ************************
+++++++++++++++++++++++++ 317.7 1979
----
1980 341.55 ************************** ----
---- ++++++++++++++++++++++++++ 352 1980
----
1981 373.89 ***************************
+++++++++++++++++++++++++++ 392.6 1981
1982 387.12 ***************************
+++++++++++++++++++++++++++++ 435 1982
TABLE IV - PREDICTED AND ACTUAL INDEX CHANGES, 1926-1982
(CHART) (3 year moving average display)
PREDICTED % CHANGE ACTUAL % CHANGE
1 minus 0 plus 1 1 minus 0 plus 1
YEAR ..0....5....0....5....0.. ..0....5....0....5....0..
| | | | | | | | | |
1927 **|****|****|****|* |6.03 **|****|****| | -1.27
1928 **|****|****|****| |3.89 **|****|***** | | .24
1929 **|****|***** | |0.24 **|****|***** | | .29
| | | | | | | | | |
1930 **|****|* | | -4.18 **|****|***** | | .00
| | | | | | | | | |
1931 **|*** | | | -7.14 **|****|** | | -3.31
1932 **|*** | | | -7.36 **|****| | | -5.64
1933 **|*** | | | -6.71 **|*** | | | -6.99
| | | | | | | | | |
1934 **|****|* | | -4.42 **|****|* | | -3.53
1935 **|****|** | | -2.51 **|****|***** | -0.07
1936 **|****|****| | |-.56 **|****|****|** | |2.25
| | | | | | | | | |
1937 **|****|***** | |0.07 **|****|****|** | |2.27
1938 **|****|****|* | |1.05 **|****|****|* | |1.35
1939 **|****|****|* | |0.97 **|****|****|** | |1.80
| | | | | | | | | |
1940 **|****|****|** | |2.30 **|****|****|****| |3.60
| | | | | | | | | |
1941 **|****|****|** | |2.26 **|****|****|***** |5.33
1942 **|****|****|****| |4.48 **|****|****|***** |4.85
1943 **|****|****|***** |5.48 **|****|****|*** | |2.86
| | | | | | | | | |
1944 **|****|****|****|* |6.32 **|****|****|** | |1.70
1945 **|****|****|****|* |6.42 **|****|****|** | |1.92
1946 **|****|****|***** |5.31 **|****|****|***** |4.77
| | | | | | | | | |
1947 **|****|****|***** |5.16 **|****|****|****|****|8.74
1948 **|****|****|***** |4.65 **|****|****|****|****|8.80
1949 **|****|****|***** |4.75 **|****|****|****|** |6.82
| | | | | | | | | |
1950 **|****|****|****| |3.90 **|****|****|****** |5.59
| | | | | | | | | |
1951 **|****|****|*** | |3.00 **|****|****|***** |5.18
1952 **|****|****|** | |2.37 **|****|****|****| |3.83
1953 **|****|****|** | |1.95 **|****|****|* | |1.02
| | | | | | | | | |
1954 **|****|****|*** | |2.54 **|****|***** | |0.23
1955 **|****|****|** | |2.30 **|****|****|* | |0.89
1956 **|****|****|** | |1.94 **|****|****|** | |1.58
| | | | | | | | | |
1957 **|****|****|* | |1.18 **|****|****|** | |2.45
1958 **|****|****|* | |1.12 **|****|****|** | |2.30
1959 **|****|****|* | |0.74 **|****|****|** | |1.58
| | | | | | | | | |
1960 **|****|****|* | |0.52 **|****|****|* | |0.92
| | | | | | | | | |
1961 **|****|****|** | |1.54 **|****|****|* | |0.96
1962 **|****|****|*** | |2.66 **|****|****|* | |1.15
1963 **|****|****|*** | |3.01 **|****|****|* | |1.37
| | | | | | | | | |
1964 **|****|****|*** | |2.83 **|****|****|** | |1.60
1965 **|****|****|*** | |2.82 **|****|****|** | |2.19
1966 **|****|****|*** | |3.41 **|****|****|*** | |2.67
| | | | | | | | | |
1967 **|****|****|****| |4.00 **|****|****|****| |3.63
1968 **|****|****|***** |5.19 **|****|****|****| |3.82
1969 **|****|****|****| |4.09 **|****|****|****| |3.87
| | | | | | | | | |
1970 **|****|****|****| |3.89 **|****|****|*** | |3.27
| | | | | | | | | |
1971 **|****|****|****| |4.12 **|****|****|*** | |3.31
1972 **|****|****|****|* |5.85 **|****|****|***** |4.55
1973 **|****|****|****|** |7.31 **|****|****|****|*** |7.52
| | | | | | | | | |
1974 **|****|****|****|*** |8.10 **|****|****|****|***** 9.70
1975 **|****|****|****|* |6.44 **|****|****|****|***** 9.99
1976 **|****|****|****|** |6.52 **|****|****|****|**** 8.93
| | | | | | | | | |
1977 **|****|****|****|** |6.74 **|****|****|****|*** |7.95
1978 **|****|****|****|****|9.29 **|****|****|****|*** |8.32
1979 **|****|****|****|****|9.16 **|****|****|****|****|9.32
| | | | | | | | | |
1980 **|****|****|****|****|9.12 **|****|****|****|****|* 10.54
| | | | | | | | | |
1981 **|****|****|****|** |7.22 **|****|****|****|****|* 11.04
1982 **|****|****|*** | |3.54 **|****|****|****|****|* 10.80
| | | | | | | | | |
PREDICTED % CHANGE ACTUAL % CHANGE
1 minus 0 plus 1 1 minus 0 plus 1
YEAR ..0....5....0....5....0.. ..0....5....0....5....0..
APPENDIX "B"
SUMMARY OF RECOMMENDATIONS
I. ECONOMIC
1. Control of monetary volume by quantitative control rather than
interest rate manipulation.
2. Quantity of the "Public Credit" to be certified to the government
regularly by the Economic Council of Canada and/or Statistics Canada.
3. The consequent Certificate of Public Credit to be deposited as an
asset of the Federal Government in the Bank of Canada, and all forms of
money issued in Canada to be entered as a debit against this account.
4. Institutions promising to pay money to the public on demand in excess
of actual currency reserves held by them to pay interest for use of the
Public Credit.
5. "Fractional Reserve" Banking to be replaced by this system of credit
control.
6. No restrictions on term investments in Banking institutions, where
money is not repayable except on a fixed future date, and this money is
loaned out on similar repayment terms.
7. Money (less amount of money and credit already in circulation) may be
drawn from the Bank of Canada for Federal Government use up to the limit of
the Public Credit as certified.
8. Such money to be used to reduce National, Provincial and Municipal
debt and taxes, and finance government transfer payments.
9. Federal Government borrowing on the commercial market to cease.
10. Interest rates to be set by market forces.
11. A policy of low foreign exchange rates for the Canadian dollar.
12. Encouragement of Canadian investment abroad.
13. Equity preferred to debt as the vehicle for foreign investment.
14. "Currency Swaps" with underdeveloped nations to avoid burdening them
with debt from foreign loans.
15. A policy to supplement wage incomes by the following means:
- Reduction of personal taxes;
- Reduction of personal debt costs;
- Encouragement of personal savings and investment;
- A guaranteed basic income to all regardless of employment, in the form
of a "National Dividend" paid on the Public Credit.
16. Overhaul of federal taxation and business incentive policies, to
eliminate obstacles to efficient business operation.
17. Abandonment of welfare policies based on a means test in favour of
those which do not discourage self-help.
II. POLITICAL
18. One third of House of Commons seats to be elected "at large", by
party rather than constituency.
19. House of Commons redistribution formula to include both area and
population factors, so giving substantially increased representation to
rural regions and Northern Canada.
20. Senators to be appointed one third Federally, one third by
Provincial Governments, and one third to represent important Canadian
minority groups.
[NOTE:
Although the general situation in the Canadian
economy, and the underlying causes and solutions to its problems, have not
changed substantially in the years since the original drafting to this
paper in 1983, the following matters should be noted:
1. The Economic Council of Canada has been dissolved.
2. Canada's National Credit has increased by about 50%, and Canada's
National Debt has tripled.
3. "Fractional Reserve" Banking has been replaced by an even shakier
system, where the limit on Bank credit creation depends on the capital of
the Bank, rather than the ratio of deposits to reserves.
J.M.H. March 1995]
(c)1983,1995 J.M.Hattersley - jmartinh@shaw.ca
ast update 10
February 2008 |
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