A very interesting question, and one that I have never thought about before. The mechanism you describe could have similar application in Canada. In the mid-sixties I worked for a year at Bank of Canada, and once every week (on interest rate day--I think it was Thursday then) some young officers would go down to a hole in the lower interior of the Bank and conduct the Treasury Bill Auction. This amounted to opening letters from various securities dealers, recording the bids they made for varioius quantities, and then relaying that information to the senior officers of the Bank, who would then supplement the pot with a bid of their own which would set the rate for the amount the government wanted to raise that day.
Getting a firm answer will require that I do a bit of reading in Bank of Canada bulletins and government budgets. Give me a week. Keith ----- Original Message ----- From: <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, August 27, 2003 7:47 AM Subject: [SOCIAL CREDIT] Question to Keith Wilde > I am posing this question to you as a Canadian > economist. Does the Canadian system differ from the > American in this regard? I keep reading from COMER > that some three percent of money is government money. > The government of the United States does not spend > even a penny into circulation that isn't covered by > tax collections or bond sales. > > Now I do know that some of the bonds are purchased by > the Fed indirectly through the so-called "open > market." The Fed is not legally permitted to > purchase directly from the Treasury. I suppose that > does "accommodate" a portion of the federal > government deficit and represents about three percent > of new money creation. > > During 1995 the Fed added about $20 billion to > banking system reserves though net open market > purchases. Assuming that represents three percent of > money creation for the year, the banking system as a > whole would have had to have added about $670 in > demand deposits to the economy. The actual numbers > can be verified from the official statistics. > > If this is more or less true, then shifting that $20 > billion from Wall Street to consumers as dividends > should represent only a ripple on the surface of the > pond. > > But could have a big impact in terms of effective > demand. > > > > ____________________________________________________________ > 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 --^----------------------------------------------------------------
