Eighty-five years ago Douglas was using the three
percent figure--but then there were still some actual
gold sovereigns in circulation. It's probably far
less than that today unless you count the Fed
"accommodation" of some portion of the federal debt
as "government money" which might (or might not--we
have to look at the actual numbers) bring it up to
three. The United States government only gets credit
to its account for the face value of the coinage it
delivers to the Fed. It gets credit only for the
"cost of printing" the notes it delivers. I keep
reading in the crank literature (COMER, Rowbotham,
etc.) that in Canada and Britain government gets
credit for the face value of the notes. Perhaps you
will verify if that is in fact true. It certainly
isn't true for the United States. But even if it
were true, the initiative in each case--I'm quite
sure--is with the central bank not government, which
delivers the notes only when ordered to do so by the
central bank. Government isn't allowed to deliver
the notes at will to fund its programs.
It baffles me as to where Rowbotham gets the twenty-
one percent figure for 1963. I have no idea what his
reasoning or source for this is. He doesn't say in
the book which seems a welter of factual error.
Except for certain relatively minor details, it is my
belief that the system in Britain, Canada and the
U.S. are fundamentally identical. Indeed, that would
include the EU and most of the world. Not only
identical but integrated. That is to say,
sovereignty in terms of financial policy is entirely
in the hands of the banks even more so than was the
case eighty-three years ago.
----original message----
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.
The 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[provide 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
dishing out currency for free to commercial banks is
utterly ludicrous. What was Rowbotham smoking when
he wrote that?
Keith
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