-Caveat Lector-
from alt.conspiracy
-----
As always, Caveat Lector.
Om
K
-----
<A HREF="aol://5863:126/alt.conspiracy:480400">TURMEL: Question for Flaherty
and Turmel</A>
-----
Subject: TURMEL: Question for Flaherty and Turmel
From: [EMAIL PROTECTED] (John Turmel)
Date: Wed, Jan 20, 1999 6:28 AM
Message-id: <784p6t$[EMAIL PROTECTED]>
>Date: Tue Jan 19 20:38:39 1999
>From: [EMAIL PROTECTED] ("Charles Michael")
>Subject: [lets] Re: Question for Flaherty & Turmel
>To: [EMAIL PROTECTED]
>Firstly, let me congratulate John on the establishment of a new
>discussion group on alternative currencies. It is much needed and
>very refreshing after lurking on the "What is a Lets" discussion
>group for too long. Even though I do not agree with you on all
>aspects of the issue I enjoy discussion about alternative currencies
>that looks at the possibilities for large scale conversion rather
>than just neighborhood currencies.
>DR FLAHERTY
>If Dr. Flaherty is still part of this mailing list I would like to
>thank him for his contribution to a vigorous debate with Turmel and
>others recently. My question relates to the fact that you have
>recently conceded a major debating point to Turmel on the question of
>banks issuing loans out of newly created money. I would like to ask,
>now that you have had several months to think about it, how has this
>affected your views on the nature of the financial system and its
>effect on the real economy and the real people who must adapt to it?
>If newly created money only appears in the form of loan principle,
>then do we indeed have to fight (and pauperize) our neighbors in
>order to free up the liquidity needed to pay our own interest bill?
>How do you explain the stats you yourself presented showing money
>supply exceeded outstanding bank loans? If banks mainly seek our
>deposits in order to have enough reserves to permit more money
>creation, then shouldn't total deposits pretty much equal total
>reserves held at the central bank?
JCT: I am not aware that Prof. Flaherty has subscribed to our new
listserv but I'll post this to sci.econ so he'll see it. If he answers
I'll post it to the [EMAIL PROTECTED] listserv.
>TO MR. TURMEL, I would ask a question regarding your alternate theory
>of the causes of inflation. If I understand you correctly, you argue
>that some inflation results from banks removing repossessed
>collateral from the economy and thus reducing supplies of (say)
>homes on the market. This shortage then leads to higher prices.
>BUT, no bank seizes collateral and then just sits on it! They seek
>to liquidate it ASAP often at "fire sale" prices. At best this would
>leave supply/demand unchanged and would likely have a deflationary
>impact, would it not? Even your often quoted Mr. Quigley says so at
>one point in the writings of his which you have published on this
>list recently. Do I misunderstand your theory or does it need some
>more refining? Thanks, Charles Michael
JCT: Actually, you've hit on one of the most difficult points to
explain. Inflation Shift B really takes place at the moment the
interest is added to the price tag thereby driving up the price so
that some of the production cannot be sold. Yet, the result is the
foreclosure of that collateral which shows shift B clearly. And an
increase in money both makes the increase in price tags closer to
paying which reduces the foreclosure due to failure. Yet, the
inflation is actually generated when the interest is added to the
prices.
I'm not sure of the best way of explaining it but I use an actual
model which people can try in my bankmath.htm. But I'll do it again
now.
>GAME MODEL: SERVICE CHARGE VS. INTEREST
> In his book `The Theory of Games and Economic Behavior', John Von
>Neumann, one of this century's top mathematicians, stated that
>"important questions in economics arise in a more elementary fashion
>in the theory of games." In the business war for markets, the economy
>decides who sells their goods and who fails to. Models used by
>economists are flawed by guesses and approximations about what the
>economy will choose. The only way to perfectly model the economy is to
>use fair chance to pick the winners and losers.
>
>TO PLAY MORT-GAGE:
> The necessary game equipment to play "mort-gage" is:
> 1) 3 types of tokens to represent food, shelter, and energy (the
>tokens can be knives, forks, spoons)
> 2) a fair chance mechanism like a coin, cards, dice, etc.;
> 3) matches, beans, chips or tokens to represent currency.
> Here is how I demonstrated the difference at a dinner party
>between the interest on a business loan and the service charge on a
>Greendollar LETSystem business. The hostess provided a bag of raw
>beans which I used as my model dollars. I used knives as tokens for
>food, forks as tokens for clothing and spoons as tokens for services
>which I put into a bowl representing the market economy in the center
>of the table.
>
>INTEREST-USURY MARKETING METHOD:
> In the Interest Game, all borrow 10 but have to inflate their
>prices to recuperate the 11 they owe the bank.
> Step 1): I had all 10 guests at the table pledge their watch as
>collateral for a $10 Beandollar loan. At 10% interest, they each owed
>me 11 Beandollars at the end of the loan period.
> Step 2) I had all 10 guests spend their $10 Beandollars into the
>market bowl in exchange for a product token.
> Step 3): Once all 10 guests now had a product token for sale, I
>used fair chance to determine who would successfully market their
>product. Starting first with pairs of players with similar product
>tokens for sale, I flipped a coin to determine which the economy chose
>to buy from. Then winner delivered the product token to the market
>bowl and collected $11 Beandollars. After the first round, half the
>players had successfully marketed their product and half had not yet
>sold. Finally, taking diverse pairs, I continued tossing the coin to
>decide who the economy chose to purchase from, the winner delivering
>goods and taking price out of the market.
> Step 4) Since everyone put in 10 and the winners all took out 11,
>eventually, the market bowl ran out of Beandollars with one guest
>still having products unsold. I foreclosed and seized the loser's
>product token and watch.
> Step 5) I explained to the winners how their $100 Beandollars had
>inflated because there were now only 9 watches.
JCT: I don't know how it should be best explained, by the
increase in prices beyond the money available or by the reduction of
goods available for that money. The problem is compounded in that the
real economy does not operate over just one cycle. If the banker were
to issue some new loans, then the foreclosure can be delayed by the
increase in purchasing power to purchase the product that would have
been unavailable. Yet, when compared to how the economy would work
without interest, it seems that whether we call inflation the increase
in prices or the decrease in available collateral are two sides of the
same coin.
>NO-INTEREST LETS MARKETING METHOD:
> In the No-interest Service Charge Game, all guests borrowed 11
>and owed 11. The 11th Beandollar borrowed was to pay the bank
>employees a service charge.
> Step 1): I had all 10 guests at the table pledge their watch as
>collateral for an $11 Beandollar loan.
> Step 2) I had all 10 guests spend the same $10 Beandollars to
>purchase their production token from the market bowl and then spend
>their last Beandollar into the market to pay for the services of the
>bank employees who facilitated the transactions.
> Step 3): I again used the coin to model the decisions of the fair
>market and noted that at the end of the game, all the production was
>sold.
> Step 4): I noted that no one lost their watch even though the
>bankers still got paid.
> Step 5): I noted that at the end of the LETS service charge game,
>there were enough watches for the Beandollars to retain their original
>value, unlike in the Interest Game. I noted that everybody had sold
>all their product tokens because the 11th unit of money had entered
>the market bowl through the bank employees' service charges.
> The very subtle difference between systems is that in the
>Interest Game, the bank demands payment of money it did not create
>while in the LETS Service Charge Game, the bank demands payment of
>money it did create. With exactly enough markets to match the prices
>of goods produced, there can be no foreclosures.
JCT: No amount of theorizing can substitute for actually testing
the models yourself. As long as most economists will not actually try
both models, they can remain adamant that they don't understand
the philosophy. Of course, once both models have been exhibited, the
lack of inflation in the LETS model can be compared to the inflation
generated in the other model and people might then decide which they
think is the better explanation for inflation shift B, the increase in
the prices at the moment of the usury charged or the decrease in
available collateral at the moment bought.
What do you think. Is the inflationary shift B shown in the first
island better explained as foreclosure or price increase due to
interest?
>Date: Tue Jan 19 23:05:06 1999
>From: [EMAIL PROTECTED] ("Paul Dumais")
>Subject: [lets] Re: Question for Flaherty & Turmel
>To: [EMAIL PROTECTED]
>Bravo, I don't think I fully understand why many local currencies
>insist on staying local. Maybe its just the unfortunate name that
>limits the vision.
JCT: Yes, the fact that LETS stands for Local Employment-Trading
System has proven to be a problem in dealing with people who say that
since Local is in the name, it must be "local" and small to work
right. I keep pointing that there is no limit to the number of
accounts possible in the database and that to Captain Kirk and Mr.
Spock, Earth is local. Yet, some people are still stuck on the
argument that it can only work small while I keep pointing out that it
actually works best when everyone has an account and can trade with
everyone else.
>Can anyone site any examples of local currencies which have combined?
>Such an operation seems easy to do. And the immediate benefit would
>be to double the number of places people could shop (roughly). I see
>two things that would have to be done to do such a combination.
>1. Zero your balances and keep them balanced. For example each
>currency should always have debts = credits. New members shouldn't
>start with credits unless debts are created elsewhere.
JCT: Though the debt side of the orthodox banker's ledger grows
with interest while the money side does not, LETS debt always is
balanced by LETS money. It is impossible to have an inflationary or
deflationary shift in a LETS currency system.
>2. Renormalize any differences in currency values. If 1 Green
>dollar = 1 Canadian Dollar = 1 Brown dollar, there's is no problem.
>Call the new currency orange and carry on. Sometimes a
>conversion is necessary (say from 1 Ithaca hour = $10 US = $15
>Canadian = 15 Edmonton Talents). Paul Dumais
JCT: There has been a great deal of work in "intertrading"
between systems though no one has really made major inroads. Still,
it's only a matter of time until they all standardize to the same Hour
of human labor, including the large commercial barter networks, and
they'll see the benefits of merging all their databases into one big
one or at least intertrading between branches via a clearinghouse.
--
John C. "The Engineer" Turmel, Founder, Abolitionist Party of Canada
915-2045 Carling Ave., Ottawa, K2A 1G5, Tel/Fax: 613-728-2196
LETS Abolish Interest Rates http://www.cyberclass.net/turmel
For TURMEL topic http://www.onelist.com/subscribe.cgi/lets
=====
Subject: Re: TURMEL: Question for Flaherty and Turmel
From: Edward Flaherty <[EMAIL PROTECTED]>
Date: Wed, Jan 20, 1999 8:40 AM
Message-id: <[EMAIL PROTECTED]>
John Turmel wrote:
> >If Dr. Flaherty is still part of this mailing list I would like to
> >thank him for his contribution to a vigorous debate with Turmel and
> >others recently. My question relates to the fact that you have
> >recently conceded a major debating point to Turmel on the question of
> >banks issuing loans out of newly created money. I would like to ask,
> >now that you have had several months to think about it, how has this
> >affected your views on the nature of the financial system and its
> >effect on the real economy and the real people who must adapt to it?
My resignation from the debate ("OK, John, you win" were myexact words)
must not be contrued in any way as agreeing with
Turmel's points. I had simply had enough of him. He is wrong
and my arguments to that effect are available from numerous
sources.
--
Edward Flaherty
School of Business & Economics
College of Charleston
Office: (843) 953-7166
Fax: (843) 953-5697
Web site: http://www.cofc.edu/~flaherty
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris
DECLARATION & DISCLAIMER
==========
CTRL is a discussion and informational exchange list. Proselyzting propagandic
screeds are not allowed. Substance�not soapboxing! These are sordid matters
and 'conspiracy theory', with its many half-truths, misdirections and outright
frauds is used politically by different groups with major and minor effects
spread throughout the spectrum of time and thought. That being said, CTRL
gives no endorsement to the validity of posts, and always suggests to readers;
be wary of what you read. CTRL gives no credeence to Holocaust denial and
nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://home.ease.lsoft.com/archives/CTRL.html
http:[EMAIL PROTECTED]/
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
