| Subject: | Re: [socialcredit] Replying to Vic (Deus Ex Machina) | | Date: | Monday, April 18, 2005 16:24:44 (+1000) | | From: | Vic Bridger <socred @.......au>
|
| In reply to: | Message 962 (written by Trevor Crosbie) |
Trevor Crosbie wrote:
"I can't believe that Vic or Mr.Bridger haven't latched on to the fact that
the "fractional reserve" system was effectively dismantled in the 1980s when
the central bankers adopted a basic accord which eliminated the fractional
reserve requirements in favour of "risk weighted capital requirements". They
were able to do that because what was used in the reserves equation became
irrelevant as the ratio of debt to cash exceeded 95%."
I am not sure what this is supposed to mean. I did not bring up the question
of fractional reserves but I did say I fully understood it. I am fully aware
of the changes that have taken place from the changes in the LGS (Liquid and
Government Securities) requirements and all of the changes that have
occurred since. anyone requiring copies of letters to me from the Reserve
Bank of Australia dating back to the 1980s can ask for them.
Irrespective of all this diversion the discussion was about the incorrect
statement, ""the government has a monopoly on producing money.banks don't
get it for free." Irrespective of what changes have been made and controls
that may exist on the banking system they do operate on a fractional reserve
system. Call it "risk weighted capital requirements", or "Capital adequacy
requirement" a "Prime Assets Ratio", it makes no difference the banking
system DOES create the major portion of the money supply. I would have
thought that before criticizing Trevor would have understood the facts.
After all he has admitted, and I quote "The money supply is principally bank
deposits and the way those 'deposits' come into being is from the current
process of 'lending' (debt creation). So what is the problem?
Vic Bridger
----- Original Message -----
From: "Trevor Crosbie" <tamac@xtra.co.nz>
To: <socialcredit@elistas.com>
Sent: Monday, April 18, 2005 9:05 AM
Subject: Re: [socialcredit] Replying to Vic (Deus Ex Machina)
> "the government has a monopoly on producing money. banks don't get it for
> free. I think you are somewhat confused. what you seem to be referring to
is
> fractional reserve which accelerates the injection of money by the
> government. I cant imagine why you have a problem with fractional
resever,
> or credit or
> banking."
>
> Vic Bridger replies: I cannot believe that the above statement was made.
It
> clearly indicates the utter lack of knowledge on the subject of money and
> banking and certainly no knowledge of and a complete lack of
understanding
> on Social Credit.
> Governments do NOT have a monopoly of producing money. Heaven help us if
> they did! I guess if they did one might ask why the necessity for taxing
> incomes etc. or any taxation for that matter, or why governments borrow
from
> time to time (deficit budgeting)?
> I am not confused with anything and I am fully aware of how the banking
> system operates and the fractional reserve system under which banks DO
> CREATE CREDIT (MONEY).
> I have no problem with understanding the fractional reserve system or
credit
> or banking. I do have a problem with people who express opinions based on
> ignorance.
>
> (TC comments) Mr. Bridger is correct in challenging the comment regarding
> government having a monopoly on producing money. The reality is that
> Treasury issues interest bearing bonds that use the ability of government
to
> tax the earnings of people working (including those of us who own and
> operate businesses) within the economy to pay the interest. The greater
the
> debt load carried by government the higher therefore the level of tax (or
> the greater the reduction in government spending on infrastructure) to
> service the debt.
> I can't believe that Vic or Mr.Bridger haven't latched on to the fact that
> the "fractional reserve" system was effectively dismantled in the 1980s
when
> the central bankers adopted a basic accord which eliminated the fractional
> reserve requirements in favour of "risk weighted capital requirements".
They
> were able to do that because what was used in the reserves equation became
> irelevant as the ratio of debt to cash exceeded 95%.
> The money supply is principally bank deposits and the way those 'deposits'
> come into being is from the current process of 'lending' (debt creation)
at
> interest that the banks use. Therefore over 95% of the money supply is
> interest bearing debt and the cost of that 'money' supply is directly
> reflected in prices, taxes and charges.
> The fact is that politicians can't or won't acept that they can
effectively
> cut out the financial middlemen in the equation of providing capital for
> building the essential infrastructure needed to build and maintain a
viable
> democratic society, which is capable of meeting the needs and aspirations
of
> all the members of that society and backing debt out of infrastructural
> assets.
> What gives the owners of the debt creating mechanism the right and the
power
> to create and control some 98% of the nations money supply? Why must the
> elected representatives of the people be reliant on a mechanism which
> neccesitates an ongoing increase in charges and taxes (Inherent inflation)
> in the provision of health, education, justice, welfare etc? The use by
our
> democratically elected representatives of a parallel mechanism, for the
> provision of essential infrastructure free of interest bearing debt, is
not
> only feasible but essential to the viability of our society and all the
> people therein.
> That is not a statement based on ignorance but founded on the reality of
the
> adverse outcomes of the present system as forseen by C H Douglas.
> Regards
> Trevor Crosbie
> Hamilton NZ
>
>
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