This is not a direct answer to your question, but
it may have some bearing on its origin.
In The Grip of Death, pp. 260-61,
Michael Rowbotham says:
...since 1963 cash currency in the UK money stock
has declined from 21% to 3%. Why should this mean that the difference
should be made up by banking and debt? If the economy runs principally on
numerical money--credit--then a government has a duty to introduce some of this
into the economy without a background of debt, JUST AS WITH COINS AND
NOTES.
Thje reforms proposed by Lincoln and Douglas were
founded upon the supply of a medium of exchange by government, circulating
debt-free... .Applying this principle to a modern economy, the responsibility on
government to p[rovide a nation's money stock CLEARLY SHOULD NOT BE RESTRCITED
TO JUST ITS CASH CURRENCY. It is ridiculous for modern governments to identify
their money supply duties with the issue of coins and notes when the use of cash
is steadily declining.
There is nothing inherently wrong with number
money, just as there is nothing wrong with paper money. ...At one time paper
money was perceived to be unstable and inherently defective. NOW, SINCE IT IS
CREATED DEBT-FREE BY THE GOVERNMENT, PAPER CURRENCY FORMS A VALUABLE PART OF THE
TINY DEBT-FREE INP[UT INTO THE ECONOMY. As credit, or number money, is now
the dominant form of money, some credit must be created must be created
debt-
free and introduced into the economy.
END OF QUOTATIONS FROM ROWBOTHAM
Now I don't know how things work in the UK, but I
am pretty sure that the Bank of Canada does not spend currency into the economy
gratuitously--nor does the government pay cash (except possibly through
graft to friends of powerful ministers). Banks collect old bank notes
and send them into the Bank of Canada for incinerating, in exchange for brand
new notes. And for any excess over the exchange, I am pretty sure they write a
cheque. The idea of the central bank dsihing out currency for free to
commercial banks is utterly ludicrous. What was Rowbotham smoking when he
wrote that?
Keith
----- Original Message -----
From: <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Wednesday, August 27, 2003 7:47
AM
Subject: [SOCIAL CREDIT] Question to Keith
Wilde
> 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.
>
>
>
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> t;
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