>From the posting below: " Do you see what a tangled web you weave when you > argue a priori rather than from observation? You > just said that loans create deposits. Now you say > that deposits can be used to create loans."
Working on the fractional reserve deposit system both can be correct. If a bank is working on a 5% reserve it means that it can lend out 20 times the amount of cash reserves it is holding. Until those reserves increase the bank is obliged to maintain that position. If (as has beeen explained elsewhere) those reserves are increased because deposits are increased from export earnings (this creit comes via the central bank which has established counterpart funds with an overseas bank), it means that the bank is able to lend more. For example if the bank is on its limit of 5% and receives a deposit for a client from the central bank for $1000 the bank is able to lend $20,000 and maintain its ratio. This is a very simple but true explanation. Thus a bank creates deposits by lending from its original reserves and can use the "ne" increased deposits to create more loans. Vic Bridger ----- Original Message ----- From: <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, June 25, 2003 4:09 AM Subject: [SOCIAL CREDIT] Would you rather hang from trees? > ->>I disagree that this is a chicken and egg > situation. The causal relationship is that loan > advances create deposits. <<< > > You are making an a priori assumption about the > causal relationship. Douglas' theorem says simply > that the rate of flow of deposits equals the rate of > flow of loans. You could just as easily claim that > deposits create loans. It could not be disproved > because it would also be an a priori assumption. > -- > > > ->>Some of which (eg, demand deposits within banks) > are never used to create new loan advances, while > other "deposits" (or, more correctly, borrowings) > might well be used for creating new loans. <<< > > Do you see what a tangled web you weave when you > argue a priori rather than from observation? You > just said that loans create deposits. Now you say > that deposits can be used to create loans. > > Continuous dynamic processes, as a matter of logic, > have no beginning or end, i.e. no cause and effect. > Every element is proceeding simultaneously. You make > sense out of them by looking at them as they > concatenate through time. That is, you observe them. > > The fact that something might seem to come first does > not mean that something is the cause of what may seem > to come next. > > Eliminate the egg there is no chicken. > > Eliminate the chicken there is no egg. > > I'll skip over some parts that we'll fill in later. > > There is an observable flux of loans from the > financial sector, and the observable reflux from the > rest of the economy in amortization of those loans. > This flux and reflux can be graphed on a chart > against time. The respective flux and reflux curves > remain identical regardless of the rate of interest-- > which is simply a matter of bookkeeping. What > changes is the bookkeeping allocation of the reflux. > At a zero percent rate of interest all the reflux is > credited to principal. At any positive rate of > interest a defined and agreed portion of the reflux > is credited to interest. > > It means simply that profit is shared between > entrepreneur and banker; what the entrepreneur pays > the banker is in payment for financial services > rendered. > > Between consumer and banker it means that the > consumer shares with the banker the appreciation in > his wealth that through his financial services the > banker helped create. > > It is part of the way we got to where we are rather > than being confined to the jungle hanging from trees. > > Which does not obviate the fact that banking is a > monopoly that must be controlled. > -- > > > > > > > > ____________________________________________________________ > Get advanced SPAM filtering on Webmail or POP Mail ... Get Lycos Mail! > http://login.mail.lycos.com/r/referral?aid=27005 > > > ==^================================================================ 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 ==^================================================================
