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COMMENTS INTERSPERSED
----- Original Message ----- From: <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Saturday, June 21, 2003 3:39 AM Subject: RE: [SOCIAL CREDIT] reply to Vic2 Bill Ryan - "If nothing in the future exists today it follows that the interest I have to pay in the future does not exist today." Vic B in response - I agree with the first statement. It is a categorical fact that "nothing in the future exists today". It is not a question of "it may or may not exist today". You cannot eat your cake and still have it. You cannot water the crops with next week's, next month's or next year's rain Bill Ryan - Not necessarily. It may or it may not exist today. Vic B in response - I absolutely disagree. it contradicts the first statement. > >>>If I am the only person borrowing $1000 at 10% I > am required to repay $1100 in one year's time. UNLESS > either I borrow another $100 to repay the original > loan I cannot do it because the interest does not > exist and can only exist through further borrowing > (loans) which increases the debt.<<< > > There are several false assumptions here which I will > just touch on. One false assumption is that in one > year's time you will have had no earnings. If you > have had earnings they will have come from the larger > economy based on credit as to progresses through > time. If you have had no earnings you could neither > pay the principal nor the interest. In steady state > further borrowing does not increase the debt. It > merely transfers to someone else. In an expanding > economy the debt is increasing but so is the credit. Vic B in response - I am sorry to disagree. there are no false assumptions. Any earnings in the future will have come from money which has been created as a debt in the first instance irrespectibe of how many hands it may have passed through. I a steady state borrowing from other individuals does not increase debt. Borrowing from a bank does increase debt and it is not a transfer to or from anyone else. > -- > > > >>>Vic B - Earnings come from other who have > contracted a debt. One may argue that some traders > are not in debt but this does not alter the fact that > as all money comes into existence as a debt a payment > of interest is only possible by drawing upon another > debt.<<< > > The false assumption here is that the economy as a > whole must borrow in order to pay interest. The fact > is that interest is merely a transfer payment no > different than the payment of profit to any > businessman. It is the transfer from your pocket to > the businessman's pocket, from which he spends on > things he needs to purchase or pay. Neither profit > nor interest are subtrahends from system flow. You > have to differentiate in your mind the difference > between bank as bank and bank as business. Principal > is paid to bank as bank and is cancelled. Interest > is paid to bank as business and is spent. Vic B response - There is no false assumption. The economy is not a static operation and somewhere someone is borrowing. For example most businesses run on an overdraft situation and if that is not borrowing "I never writ not no man ever loved". How is it possible to transfer interest if it is does not exist which is what was originally stipulated? It is not a transfer from my pocket to anyone of it does not exist. What is transferred is money and that money has come into existence as a debt. If part of that debt is taken by a recipient to repay a loan interest charge it then becomes part of the bank's income. However that does not negate the fact that UNLESS there is further borrowing someone somewhere will find themselves in trouble. As I said, if banks stopped lending and demanded all loans to be repaid it would become clearer. The fact that this has not happened does not alter the fact. >Bill Ryan - "You borrow in order to get money to spend, so you spend the money you borrow. If loans are called prematurely very few loans could be repaid by the debtors. That has nothing to do with the fact that interest is charged. . Vic B response - It has everything to do with interest charged. If I borrow and spend the money I still have to obtain the original amount borrowed plus the interest factor to repay the loan. > > Let's say that a loan comes due with accrued interest > not yet paid. That interest does exist in the form > of assets somewhere in the economy. Whether you > personally have the equivalent to them or not is a > separate issue. Assets are not limited to money but > in a rationally constructed system can readily be > turned into money as needed. That is the use for > financial services and the providers of financial > services deserve to be paid for their services. Vic B response - That's where we differ. I claim that the interest does not exist and certainly not in the form of assets. Assets are not only not limited to money but money is not an asset. > > Take the case of a simple discount loan: You tender > to the banker your personal note for $10,000 payable > in one year. He discounts it %5 and credits your > account in the amount of $9,500. He credits his own > account as a businessman in the amount of $500. You > are expected to pay $10,000 at the end of the year. > You received only $9,500 but $10,000 does exist in > the economy. Vic B response - Just as Douglas extended his cost analysis from one business to all businesses to arrive at his A+B Theorem I can do the same in reverse. If only the bank and myself exist and the bank provided me with $9,500 that is all I can repay. The $500 which the bank has prematurely accounted for as profit because it has been accrued on the expectation of my paying it does not exist except as a bookkeeping entry. Even so the bank has created $9,500 which I did not spend because there was nothing to spend it on but I still have to repay $10,000. The interest was not created unless the bank spent it with me. It is hardly likely that if the capital of the bank was $10,000 that they would pay out $9,500 plus $500 and leave themselves with nothing. I would still appreciate a reply to my request 17 June 2003: What money is created, i.e. new money coming into
existence, that has no charge, interest, or other obligation such as a requirement for repayment? We know bank loans consist of the major portion of the money supply. The rest is petty cash in comparison. Currency in the form of notes and coins are recorded as a liability and we know there is cost involved in producing them but they are not given away free. They simply form the basis of exchanging (where they are) bank credit already in existence by way of loans (loan credits). Governments do not create money, they borrow it. Vic B ==^^=============================================================== This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^^=============================================================== |
