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John R asks, in my comments about having enough money to
repay interest
But Graeme, the underlying argument here is related to how much is being
extinguished.
What mechanism are you basing your assumptions on?
I am basing this on banks writing new money "out of thin
air" by contract, and the new money disappearing again, as the loan is paid
down.
I can see that a steady economy, not necessarily a growth
economy, can achieve that.
Graeme T
----- Original Message -----
Sent: Monday, May 18, 2009 6:42 AM
Subject: RE: [socialcredit] Re: 100
percent reserve system
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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