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Hi Bill (McGunnigle),

Well, I think there are probably a lot of things which affect interest rates at present, but if we were able to ever implement proper 'social credit' in the manner Douglas envisioned, I think we'd find it really wouldn't make a lot of difference what the interest rates were. Though in all likelihood they would be considerably less than they are at present for most loans.

As I understand it, New Zealand's interest rates are higher than they are here and in many other countries. And perhaps that's something more to do with the present and anticipated future 'purchasing power' of the Kiwi buck in terms of what it'll buy in NZ products than it is banker greed.

Regards,

Joe

----- Original Message -----

From: William Hugh McGunnigle

To: socialcredit@elistas.com

Sent: Saturday, November 08, 2008 12:00 PM

Subject: Re: [socialcredit] Re: The "Cook Plan"

hI JOE

AS usual you have pointed out solid arguments about the incurrance of interest payments. The standard reply by "orthodox economists" is always "the market will decide interest rates". To me this is a piece of pink cloud cukooland thinking related to the "flat earth" theorists era, A blind faith in an unproven and unsupported piece of speculation. I have never been able to get a proper answer from any of these economists about what comprises "the market". or any explanation why "market forces" should actually influence intrerest rates apart from greedy bankers taking advantage of the need for funds to be made available for needed expansion of commercial activity and thereby deliberately increasing interest rates until no one will borrow from them anymore. It has been obvious to me for many years that this chaotic situation must eventually collapse under its own instabity, but somehow we have seen international collusion between governments to cloke this problem. I tyhink that now China and India are now more fully integrastred into the worlds economic cash flow that the end is in sight. Much of the blostering of the present system has come about because many highly skilled tasks have been transferred to those countries becausde of lower labour costs. Now those countries are beginning to feel their economic miuscles on the world economy and will no doubt exercise that muscle in the same way that the USA did in the late `19th and early 20th centruries. It will create a radical shift in the world's power base from Western Europe and North America to Asia. The consequencese of this will be a progressive impoverishness for the West, and possibly conflict between the two areas for world domination. Not a pleasant scenario for the rest of the human race.

Bill MCGunnigle
----- Original Message -----

From: Joe Thomson

To: socialcredit@elistas.com

Sent: Thursday, November 06, 2008 6:57 PM

Subject: Re: [socialcredit] Re: The "Cook Plan"

Hi Bill (McGunnigle),

I have no doubt that a rise in interest rates can indeed have serious consequences for those who must pay those increased charges from an income that hasn't increased.

But as a practical matter wouldn't it make more sense to try to determine "why" those interest rates have risen than to imagine that all would be "sweetness and light" if 'interest' itself could only be abolished? Which would be totally impractical to do if we want to preserve any measure of a free market economy and all the benefits it entails.

The point is, 'interest' can be reduced in respect of its largest component, a 'premium' assessed for the risk of default, simply by reducing the risk of default.

We can do this on an overall, or macro-economic basis, through the proper application of the Social Credit prescriptions of the National Dividend and Compensated Price Discount.

These National 'accounting adjustments' ensure there is always going to be sufficient 'effective demand' present to enable 'real demand' to be fully satiated so long as there is the physical capacity available to fill it.

They allow the rate of profit necessary to more fully amortize loans to be maintained, and with that capablility the 'risk of default', and the interest premium charged in respect of it, is either eliminated or greatly reduced.

In the whoile economy, itt could be reduced to the point where the interest cost on many well-secured loans would basically entail the cost of providing the financial service itself (the 'bookkeeping'), plus the minimum amount of profit to make it worthwhile anyone providing it.

This method is practical. The alternate idea that a 'government' could simply provide all the money 'interst-free' will NOT lead us towards any kind of 'economic' or 'political' democracy where the 'free-will' of each individual in "making his own Policy effective unto himself" will ever be allowed to flourish.

Regards,

Joe

----- Original Message -----

From: William Hugh McGunnigle

To: socialcredit@elistas.com

Sent: Wednesday, November 05, 2008 12:56 AM

Subject: Re: [socialcredit] Re: The "Cook Plan"

hI joe

Sorry I am at it again. Your comments about interest are very pointed. If the equation is extrapolated and you postulate increased interest rates you very quickly reach a point where the whole of a single earner family's income becomes totally used up servicing the Mortgage debt. This has horrendous consequences on family life. I know by personal experience. I lost a wife because of that. I was forced to work to keep up with the needs of wife and family and grew apart from them. Result I now live on my own in lonely retirement. All because I allowed myself to be conned into the evil debt system. It has been a very hard lesson but it is one that convinced me of the iniquitious damage that the debt fuelled economy can do to an individual. I am now a dedicated monetary reformer.
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