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Messages from 6781 to 6809
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| Subject: | RE: [socialcredit] Re: 100 percent reserve system | | Date: | Wednesday, June 3, 2009 22:25:28 (+0000) | | From: | John G Rawson <johngrawson @.......com>
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| In reply to: | Message 6794 (written by Swieto Radosci) |
Thanks Swieto. I will reply with an example I first heard from one of our early great men, at the age of about 4 or 5, and which has stuck in my mind since then. It is, of course, a bit dated to the time when expansion would have been accomplished through savings, rather than the modern parallel method of overdraft/depreciation charges. And not quite word for word!
"A bootmaker saves some of his profits to buy a new and better machine, for, (say, then,) £100. Therefore, £100 of his takings is not used to buy groceries etc, but on a capital item.
This machine enables him to make boots faster and cheaper, but he must cost into their price enough to repay his investment.
So, as far as his business is concerned, the £100 cost goes into two sets of prices, but is paid out only once as purchasing power."
I know you will say the manufacturer of the machine could use the sum for private use, but of course his business also has costs.
In passing, I will repeat that I decry this and other methods of trying to "prove" the "B cost gap". I much prefer the scientific inductive approach of testing against reality. There are several fields in which the Douglas analysis explains economic conundrums that orthodox theory can not, so it is the latter which is shown to be faulty under test.
Regards.
John R.
> Date: Wed, 3 Jun 2009 15:30:44 +0200
> From: radosc@radosc.x.pl
> To: socialcredit@elistas.com
> Subject: Re: [socialcredit] Re: 100 percent reserve system
>
>
>
> John G Rawson wrote:
>
> > And reinvestment produces new production (if applied to industry) and
> > new costs, without increasing the money supply.
>
> Could you please explain how reinvestment could NOT increase the money
> supply? In my view reinvested money goes to firms which pay salaries and
> dividends which constitute additional purchasing power, new money
> supplied from bank to the market.
>
> Kristof Levandovski
>
> > Regards.
> > John R.
> >
> >
> >
> >
> > ------------------------------------------------------------------------
> > From: telergy@bigpond.com
> > To: socialcredit@elistas.com
> > Date: Mon, 18 May 2009 19:52:19 +1000
> > Subject: Re: [socialcredit] Re: 100 percent reserve system
> >
> > Hi John
> > you write
> > What portion of the interest etc. paid to banks do you see being
> > "extinguished", and what proportion do you think goes to pay their
> > working expenses and profits to shareholders?
> >
> > I see no part of "interest" on loans being extinguished. The only new
> > money numbers that lending banks create, are extinguished when the
> > principal is paid down. That is all the creation/extinguishment they
> > carry out.
> >
> > The interest component (plus fees and charges) represents the margins
> > for their business (a bank) to operate.
> > Debtors have to find these money numbers, additional to the amount
> > they borrowed, out of the "slush fund" of money already existing in
> > the economy, whether it be money numbers created by other loans,
> > and/or physical money.
> > Reserve Banks/Mints create and extinguish physical currency, but
> > that's a seperate issue.
> > The interest and other charges by banks, are a fee for their services,
> > the same as any other business charges more than it costs. I can't see
> > any money extinguishment, nor creation, in these fees.
> > BTW
> > For over 300 years, the "lore" or formula of Banks keeping capital, at
> > least 6 or 7% relative to the amount of new loans they write, was seen
> > to be best practice. As to why Greenspan chose to ignore this, and
> > allow "easy money" is a quandary. Obama has recapitalised those banks,
> > so time will tell, I guess.
> > As Ellen Brown wrote, the IMF forced Japanese Banks to recapitalise
> > around 1990. Fat lot of good it did Japan tho'.
> >
> > interesting times
> > Graeme Taylor
> >
> >
> >
> >
> > ----- Original Message -----
> > *From:* John G Rawson <mailto:johngrawson@hotmail.com>
> > *To:* Socred elistas <mailto:socialcredit@elistas.com>
> > *Sent:* Monday, May 18, 2009 1:38 PM
> > *Subject:* RE: [socialcredit] Re: 100 percent reserve system
> >
> > Sorry Graeme. We were discussing extinguishing of money, not
> > creation of it.
> > I'll try to be clearer:
> > What portion of the interest etc. paid to banks do you see being
> > "extinguished", and what proportion do you think goes to pay their
> > working expenses and profits to shareholders?
> > Regards.
> > John R.
> >
> >
> >
> >
> > ------------------------------------------------------------------------
> > From: telergy@bigpond.com <mailto:telergy@bigpond.com>
> > To: socialcredit@elistas.com <mailto:socialcredit@elistas.com>
> > Date: Mon, 18 May 2009 08:28:09 +1000
> > Subject: Re: [socialcredit] Re: 100 percent reserve system
> >
> > 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 -----
> > *From:* John G Rawson <mailto:johngrawson@hotmail.com>
> > *To:* Socred elistas <mailto:socialcredit@elistas.com>
> > *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 <mailto:telergy@bigpond.com>
> > To: socialcredit@elistas.com <mailto: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
> > http://www.uea.ac.uk/env/ijccr/abstracts/vol13freire.html
> >
> > 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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> >
> >
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