Bill I regret I am guilty of the newspeak here!! I paraphrased the passage and added that bit in. For the record, the passage reads:
[SARB as Controller of notes issues] �Since its inception the Reserve Bank has had the sole right to the issue of bank notes and coins. This cash comes into general circulation through the purchase of assets (usually financial assests) by the bank. By the purchase of government stock and assets from banks, credit is actually made available by the Reserve Bank to government and banks. The Reserve Bank is largely guided by the public�s cash requirements (�till money requirements�) in its issues of notes and coins.� The sentence structure is misleading. I believe the one sentence should read: �By the purchase of government stock [from government] and [of] assets from banks, credit is actually made available by the Reserve Bank to government and banks.� I see it as spent into circulation a) by government in the form of social pensions and grants paid out in cash (cash is standard practice here), and b) by businesses and sundry employers drawing cash from banks for change requirements and for the payment of wages in cash. I suppose the latter should be seen as being lent into circulation if it drawn against an overdraft facility? On your other email, you ask: >Does it purchase directly from government or >indirectly through the so-called "open market" as in >the United States? I answer �as far as I understand it�. In this function, the Reserve Bank purchases directly from government so that government is really creating new money (credit). In its other function, which is its primary function, the Reserve Bank buys and sells government bonds and other instruments on the open market as a mechanism to protect the value of the Rand. Here is a quote from a Reserve Bank reply to a query of mine: � Currently its main task, as defined in terms of the South African Reserve Bank Act and in the Constitution of the RSA, is to protect the value of the currency, i.e. to keep inflation as low as possible. This is very much in line with contemporary central banking practice all over the world.� The Reserve Bank strategy is to control the economy by market-orientated actions rather than by direct interventions (instructions). The Bank can, however, act directly by increasing or decreasing the legal (cash) reserve rquirement, but they try not to resort to such harsh measures. I don�t know if this explains it satisfactorily, Bill, but I could develope it at fuller length if necessary. By and large, the government, through the Treasury and the Reserve Bank, are fairly well responsible for the money supply in the country. The Reserve Bank is not controlled by private interests, though there has been an unhealthy motion adopted at the recent Annual General Meeting which could open a crack in the system. It alarms me greatly, but fortumately it would need ratification by Parliament. I have writtten to the Minister of Finance about it and await his reply. Jessop. ---------------- On Wednesday 17 Sep 2003 9:40 am, you wrote: > One more thing, Jessop. Is this paraphrase of the > source or is it quoted verbatim? If it is verbatim > it is very cunningly crafted. Notice it says the > "cash has been spent into circulation." I do not > believe any of it is spent into circulation. I > believe all of it is lent into circulation or the > significant portion of it, even in South Africa. The > Moslerite William Hummel challenged me on this the > other day by claiming that the Fed when it purchases > securities is "spending" money. It is true that it > "purchases" securities but that is tantamount to > lending. It is not the same thing as purchasing the > products of industry. This is part of the "newspeak" > we are apparently being subjected to throughout the > world. The term "fiat" used to mean government money > spent into circulation like the nineteenth century > greenbacks. Now they are using the term for bank > credit lent into circulation with the inference that > it's exactly the same thing. Do you see what is > happening here? It is an inversion of the meaning of > words and is a subtle though powerful form of > deception. > > >Over here, The South African Reserve Bank has the sole right to issue new > > note and coinage currency. The Bank issues new notes and coins according > > to the public�s cash requirements (aka �till money requirements�). The > > cash comes into general circulation when the Reserve Bank buys government > > stock from the government or financial assets from the banks. In the > > process, credit is made available to government or banks who then draw > > cash as required to spend. The cash then has been spent into circulation. > >(Sources: SARB and �Basic Macro-Economis�, by L J Fourie & F van den > > Bogaerde, published by I L van Schaik.) --^---------------------------------------------------------------- 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 --^----------------------------------------------------------------
