But Graeme, the underlying argument here is related to how much is being extinguished.
What mechanism are you basing your assumptions on?
Regards.
John R.
From: telergy@bigpond.com
To: socialcredit@elistas.com
Date: Sun, 17 May 2009 20:34:19 +1000
Subject: Re: [socialcredit] Re: 100 percent reserve system
I'm just trying to pull together some cross boards and comments.
Payment of interest on loans is possible, so long as the amount of loans being created is equal to the amount being extinguished. Physical currency, for day to day operations of each bank is insufficient capital to hold. This is Greenspan's massive mistake. There needs to be a capital ratio, relative to loans written, for banks to properly serve their purpose (or supposed purpose) of keeping a tension (interest) on the new money supplied to the economy, additional to the amount of M1 (physical and capital backed money numbers) Or else we get easy money, being created for all this hyper priced derivatives and all those other fanciful financial instruments.
Lending banks just kept writing new money for the investment banksters.
What may be of interest to all, or some here, is a new article in Community Currency Research, from Brazil, where the new govt is looking to LETS type barter networks to pick up the slack in times of underemployment. As a tool of monetary policy, perhaps regulated by their Reserve Bank.
See here
click on bottom to a pdf file
Graeme Taylor
----- Original Message -----
Sent: Sunday, May 17, 2009 1:14 PM
Subject: Re: [socialcredit] Re: 100 percent reserve system
At 12:41 AM 16/05/2009, William Ryan wrote:
Perhaps you will tell us, John, what point you were trying to make by posting this essay by William Hummel. He is not a particularly deep thinker. He entitles his essay, "What is a 100 percent reserve system?," then proceeds to describe a fractional reserve system, albeit one that is more centrally controlled than the one we now have. There is at least one bank in Hummel's system that loans against fractional reserves:
"The money supply could change only as a result of open market operations or lending by the central bank."
Like Bill McGunnigle, you have badly misinterpreted the proposed 100% reserve system. It is not a fractional reserve system. Read my latest reply to Bill, and it should become clearer.
John Hermann
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RE: Re: 100 percen
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