Credit Reform

79 posts / 0 new

Thu, 2010-09-23 18:38

George Victor

sd: "Can you offer any thoughts at all as to why you apparently support the policy of allowing private banks to create all of our money as interest-bearing debt? If you really don't watch tv, your apparently slavish following of the economic status quo is a bit hard to understand, as the tv is the central method in the modern world of keeping people from thinking much about things like this and just believing whatever nonsense they are told - most people these days who don't watch tv are either hospitalized and doped up or have at least one foot outside of the box like thinking people tend to do - you seem to be lucid enough to preclude any assumption you are hospitalized, and yet you cannot see this elephant in the living room called 'give me the power to create a nation's money and I care not who makes her laws!' ??? puzzling."

As I said above, sd, ending the current control by private banks would be just lovely.

But you seem unable to separate analysis from the normative. I have been describing how we would up in this pickle, and you have ignored that process...as though the investment community will give up the right to speculate in finance capital markets as well as commodities...

And right now, you would have to convince the people invested in the market through their pension fund managers that your truly wonderful idea would mean valhalla...at the end of the loss of their funds.

I don't see a practical way, AT THE MOMENT, of overcoming the political barriers to your objective. But perhaps you saw the Japan has just said bugger convention and spent "as much as $23-billion (U.S.) to intervene in currency trading and weaken the yen - a currency that many analysts acknowledge is significantly overvalued. On Friday, a defiant Japanese Finance Minister Yoshihiko Noda vowed to

intervene again - and again- for as long as it takes to bolster its flagging export-dependent economy..." Barrie McKenna writes in today's Globe. "When the amounbt of currency traded in a few weeks exceeds the value of the globel economy, the conventional wisdom about free-floating currencies may not always be the smart chaice." (wow, such acumen) "The sheer volume of currency trades is swamping the kinds of eonomic fundamentals that should drive currencies."

The Globe quotes Dan Ciuriak, former deputy chief economist at Foreign Affairs and International Trade (Canada), who said one of the flaws of exchange rate orthodoxy is that currencies don't actually float, they fluctuate."We're purists in a non-pure world,' explained Mr. Ciuriak, now an Ottawa-based conculting economist. 'We ought to be interventionists....Firm by firm we are destroying our export market (as the Canadian dollar rises) ' he said.'Companies invest all this money to establish a presence in export markets and then they get driven out.'

Personally, I don't believe we are going to see Fidel's NDP government until the party begins to speak truth to industry on this one. Reforms COULD follow. But first, get elected.

Sun, 2010-09-26 09:22

#53

thanks

from forty-four: "does not appear then on the money supply records -"

definitions seem to change a lot.

like 'capital'. http://www.rabble.ca/babble/international-news-and-politics/does-regulat... .

It used to be, as i understand, 'capital' meant physical infrastructure and money.

in the BIS language 'regulatory capital' is pretended to mean money regulated by public institutions, not physical infrastructure, yet in reality no capital is regulated by public institutions currently: Where monied powers run the show, the public has no real power to regulate pieces of capital.

I guess when money is sunk into physical infrastructure, its not part of the 'money supply' but it is still 'capital'. When physical infrastructure is sold, ...

well, here is where i get confused.

money supply means reserves plus created debt in the current setup.

a lot gets transferred around as promissory notes, further leveraged, expanding the money supply.

i don't see how money supply can be defined at all now very accurately as there is no publicly monitored record of specific transactions where leverage/further debt that-is-money-creation occurs.

jobs around the house need doing, i try to read in breaks when i have energy.

nb. links in this thread are confusing as monetaryreform.com/BoC ones cannot be found directly from the monetaryreform.com site if one goes there first. comments added here do not exist on statistical references at the monetaryreform.com site. the BoC links mentioned here appear to be creations of babblers.

trust is constantly undermined.

one can get hope from good ideas, but if the deliverers of those ideas are false...its very difficult to lend credence to the ideas.

Sun, 2010-09-26 09:59

#54

thanks

well, ok, if a piece of physical infrastructure is resold, the buyer sinks money in, thus reducing the money supply to the same extent that the money supply is increased as the buyers money circulates. the buyer got the money from somewhere, maybe a bank loan of newly-created money, and maybe the buyers money went to a seller who leverages that money further.

i haven't thought through profit and money creation yet. as noted, need to read more.

in any case, with zero cash reserves required now, its anyone's guess how much money is being created.

'Money supply' quantification is fictional.

The only credit supply currently real is publicly verifiable Bank of Canada notes, yet they are real only to the extent that Canadians are able to support them with work and only to the extent that the environment is sustainable.

Currently there are fewer and fewer decent jobs and the environment is deteriorating, so it can be acknowledged that even cash is useless.

In terms of transition to credit reform, the government could take full control of money supply as noted above, to buy back national assets, based on the real capacity of Canadians to work and the sustainability of healthy ecosystems.

The definition of Canadian credit then could be changed to reflect time credit and resource 'depletion units', but not while Canadian credit is also defined as 'dollars' and exchanged in status quo money markets.

Sun, 2010-09-26 10:49

#55

thanks

Now, given considerations at:

http://www.rabble.ca/babble/babblers-helping-babblers/money-or-value

if a person would like to live as if the kin-dom was amongst us,

all the work of housework, food growing and prepping, listening and caring, writing occasionally as a volunteer, etc.,

would be valued, accounted for, compensated in a credit system.

a good credit system would not force people into roles they don't want.

[notice the word 'knot' was excluded]

Sun, 2010-09-26 12:47

#56

siamdave

thanks - I would recommend going to donOLD's video page here http://www.monetaryreform.com/MR/videoPage.htm and just watching a bit - the main three I would recommend would be the Money Masters, for a good hsitory of the basic struggle, followed by Money as Debt, the Grignon film from Canada which is very good, and also the Money Fix vid. This will get you into the ballpark pretty well. The Oh Canada one at the first is quite good too - it shows pretty graphically that even our MPs don't really have much idea about all of this. And I hesitate to keep recommending it, but I think it is a pretty good overview - my own essay What Happened? http://www.rudemacedon.ca/what-happened.html - there is a PDF you can download and print that you can take with you sometime you have to be on a train or bus or plane or something where you have a bit of reading time. I think it explains things pretty well.

Sun, 2010-09-26 13:24

#57

thanks

thanks siamdave, i can review the 'money masters' video, and look at the others,

however,

the 'money masters' video did not deal with housework.

i still have to finish reading monetaryreform.com, and if it doesn't include housework then the reasons for inclusion of Waring's work and simple logic are clear:

do the math.

add one piece of good but limited work with another piece of good but limited work and perhaps you get a better piece of work.

the implication in 'volunteer writing' too is: Others considering themselves professional writers need to do their job and connect the dots as well, not simply rely on an occasional letter-writer who is most of the time doing food, home, repairs, etc.

Sun, 2010-09-26 14:53

#58

donOld

thanks wrote:

if a person would like to live as if the kin-dom was amongst us,

all the work of housework, food growing and prepping, listening and caring, writing occasionally as a volunteer, etc.,

would be valued, accounted for, compensated in a credit system.

The issue of what to include in the definition of work is an important one. Personally I would vote to pay homemakers a salary too. But the fact remains that when the provider of a service is in the same family as the consumer of that service, the income being earned is also being spent simultaneously.

If you look after someone else's children, or parents, the service that you provide can be priced and sold to another consumer, therefore money must be created to enable the transaction. When the transaction occurs within the same family, the salary paid to mom (the service provider) would have to come out of either mom or dad's own pocket (the service consumer). Since the provision and consumption of the service occurs simultaneously, no new money is required to enable the transaction.

Unless, of course, society agrees to include the cost/value of parenting as part of the collective social benefits that they receive. It makes perfect sense to me to include it as part of full healthcare, but others without children may disagree.

Sun, 2010-09-26 14:56

#59

donOld

thanks wrote:

It used to be, as i understand, 'capital' meant physical infrastructure and money.

in the BIS language 'regulatory capital' is pretended to mean money regulated by public institutions, not physical infrastructure

In the broadest economic sense, capital usually includes any asset (physical or financial) set aside or used primarily for investment purposes. The BIS's definition of regulatory capital is far more narrow and focuses primarily on the liquidity factor of the investment.

http://www.bis.org/press/p981027.htm

Quote:

I guess when money is sunk into physical infrastructure, its not part of the 'money supply' but it is still 'capital'.

Not necessarily. When money is "spent" it simply moves from one bank account to another. As long as it is not used to pay down a debt, it remains a part of the total money supply. If new credit is used to fund infrastructure, the money supply expands. If old credit is paid off with the proceeds of a sale, then the money supply contracts.

Quote:

i don't see how money supply can be defined at all now very accurately as there is no publicly monitored record of specific transactions where leverage/further debt that-is-money-creation occurs.

The primary record used is bank assets and liabilities. Any new credit extended to customers will show up as an increase on the asset side of a bank's ledger. Presumably, the credit that large retail corporations offer their own customers (you know, the old no payments for 6 months idea) pass through an affiliated financial institution and appear on the record.

Quote:

nb. links in this thread are confusing as monetaryreform.com/BoC ones cannot be found directly from the monetaryreform.com site if one goes there first. comments added here do not exist on statistical references at the monetaryreform.com site. the BoC links mentioned here appear to be creations of babblers.

trust is constantly undermined.

one can get hope from good ideas, but if the deliverers of those ideas are false...its very difficult to lend credence to the ideas.

The BoC stats that I posted were not on the monetaryreform website before I began posting on babble. I added them solely for the purpose of sharing information with this group. There is nothing dark going on here.

Sun, 2010-09-26 23:15

#60

siamdave

This paying for housework and similar things might sound good as a quick comment, we'd all like painless ways to boost our income, but there would seem to be many problems - it's kind of 'thread drift' here, and could easily take up a lot of talk time, but just quickly the main problems I see:

1. If somebody is paying you, then that somebody is your employer, and is probably going to want to have some say in quality standards etc. For example - there are a whole lot of very dysfunctional people running around in our society - we want to pay whoever is raising these people as children for creating such dysfunctional members of society? Conversely - does 'the state' set certain standards and have inspectors wandering around at random knocking on doors and filling in forms on the quality of the work being done? I can see a lot of people not being happy with this ...

2. Related - whoever is doing the paying is naturally going to also want some proof that work is actually being done - I don't think many of us would want to be sending out a lot of cheques every month based on nothing more than self-submitted claims.

3. Where does it stop? Do I get paid for making my own breakfast before work, and shining my shoes if I work in an office where neatness is expected?

- to me, the whole thing smacks of capitalist bean counting - and we are trying to get away from capitalism here. Looking after myself - or my family - is part of my life, not my work life, and I don't really see any reason somebody should be paying me for this. The claim that a paid maid doing somebody else's dishes is comparable to me doing my own dishes is not really valid, I think, as the 'reductio ad absurdum' quickly kicks in, and we can claim we should be paid for everything - I drive my car, and there are chauffeurs getting paid for driving cars, so I should get paid for driving myself downtown?

Not really.

Just thoughts.

Mon, 2010-09-27 07:19

#61

thanks

This part, http://www.monetaryreform.com/MR/profitDebt2.htm, is very useful for farmers and food eaters; farmers know that vertically integrated corporate supply chains in the food industry are destroying farmers. The contents explain how the set up relates to the money supply.

Mon, 2010-09-27 07:30

#62

thanks

"Any new credit extended to customers will show up as an increase on the asset side of a bank's ledger."

it will also show up as an increase on the liability side of the bank's ledger.

Mon, 2010-09-27 07:59

#63

thanks

I understand the criticism and sarcasm of claiming the rich are those "God has favoured", http://www.monetaryreform.com/MR/profitDebt3.htm, but it's not entirely true.

Many rich don't think about God at all and many who are not rich know that God [term flexible], through people, works to change the current destructive system.

Biblical examples include admonitions against usury, calls for jubillee from debt, stories like that of the rich young man whom Jesus asked to give up his wealth, descriptions of the early church where believers shared their goods in common, and Jesus' call for any who did hold Caesar's idolatrous coins to 'return them to sender' and instead uphold a holistic system valuing all life.

Mon, 2010-09-27 08:33

#64

thanks

siamdave, as for your comments regarding housework, the problems you've noted are the same in any workplace. Local communities of workers of different kinds are needed in any system to provide accountability and good function.

There is also preference. Many do not like to do housework and related work. The same could be said for any job.

The diagram at http://www.monetaryreform.com/MR/betterWay.htm could include homemakers as Employers producing services. It doesn't entirely feel right calling those services 'business services' nor 'government services'.

Another thought; the diagram reflects the economy however it implies political hierarchy, with the credit bank at the top. it might be useful to include arrows for participatory governance.

Also it would be useful to add a larger circle around the whole diagram for the earth subtracting the enclosed economy use of 'depletion units'.

At http://www.monetaryreform.com/MR/livingBetter.htm statements regarding GDP as including only internal labour value need to be balanced with other measures of Earth's State. As I understand, the 'depletion units' are not subtracted from human labour values; they are a separate set of accounts. That set of accounts needs to be clarified in relation to GDP- perhaps encompassing GDP, but certainly not ignored in Living Better.

Mon, 2010-09-27 08:46

#65

thanks

i'll try to look at the other items later.

Tue, 2010-09-28 02:16

#66

donOld

thanks wrote:

it will also show up as an increase on the liability side of the bank's ledger.

of course

Tue, 2010-09-28 02:18

#67

donOld

thanks wrote:

I understand the criticism and sarcasm of claiming the rich are those "God has favoured", http://www.monetaryreform.com/MR/profitDebt3.htm, but it's not entirely true.

Many rich don't think about God at all and many who are not rich know that God [term flexible], through people, works to change the current destructive system.

Biblical examples include admonitions against usury, calls for jubillee from debt, stories like that of the rich young man whom Jesus asked to give up his wealth, descriptions of the early church where believers shared their goods in common, and Jesus' call for any who did hold Caesar's idolatrous coins to 'return them to sender' and instead uphold a holistic system valuing all life.

I'm not going there. I was simply paraphrasing the Ann Rand theology.

Tue, 2010-09-28 02:53

#68

donOld

thanks wrote:

the diagram reflects the economy however it implies political hierarchy, with the credit bank at the top. it might be useful to include arrows for participatory governance.

Interesting observation, thanks. I hope the explanation makes it clear that no such political hierarchy is intended. New money begins with an individual's desire to contribute their productive labour to society. Because new tangible wealth will be created, new money to represent the trading value of that wealth must also be simultaneously created. The power and control over money creation rests with individuals who are willing to contribute their productive labour to society, not with an elite group of financiers.The credit bank is only there to serve individuals not restrain them.

Quote:

Also it would be useful to add a larger circle around the whole diagram for the earth subtracting the enclosed economy use of 'depletion units'.

...statements regarding GDP as including only internal labour value need to be balanced with other measures of Earth's State. As I understand, the 'depletion units' are not subtracted from human labour values; they are a separate set of accounts. That set of accounts needs to be clarified in relation to GDP- perhaps encompassing GDP, but certainly not ignored in Living Better.

This is really a separate subject. I addressed it only briefly in the footnotes because I feared that it would distract the reader away from the more important points about money that I am trying to get across. My website is intended only to be a starting point, to inspire people to begin thinking independently and creatively about how a better society might operate. Providing too many of my own personal opinions, might worry readers that I am some kind of pro-government control freak. Please believe me, nothing could be further from the truth.

Tue, 2010-09-28 08:12

#69

siamdave

thanks wrote:

siamdave, as for your comments regarding housework, the problems you've noted are the same in any workplace. Local communities of workers of different kinds are needed in any system to provide accountability and good function.

There is also preference. Many do not like to do housework and related work. The same could be said for any job.

- But I don't think of my home as a workplace. I don't think when I fix a meal or do the dishes or any other of the many things I do every day I am doing a 'job' that by golly somebody ought to be paying me for. And I must confess I don't really understand the mindset that does regard looking after themselves as a 'job' they should be paid for.

Tue, 2010-09-28 22:28

#70

donOld

Fidel wrote:

Okay shazam! GCM is now the way in Canada. And there is a lot we could do with GCM. Fine, we're on the road to sovereign control of our national destiny. But wait!

And this... Posted by utopian, Sep 23 2010, 05:37 AM http://z6.invisionfree.com/Bill_Still_Reforum/index.php?showtopic=507

Wed, 2010-09-29 08:09

#71

thanks

re: 'more important points about money'; your statement is incorrect:

Without the planet there is no money, no credit system, no nothing.

Wed, 2010-09-29 08:37

#72

thanks

I'm not sure this is correct, from http://www.monetaryreform.com/MR/TBYL/Chpt1.pdf

"For example, if a bank has two-million dollars
in deposits and one-million dollars out in loans,
then its contribution to the total money supply is
three-million dollars, for it is fully obligated to provide
its customers with their two-million dollars and
it has already loaned another one-million dollars
into circulation."

My understanding is that a bank creates a deposit at the same time it creates a loan - the statement above implies deposits are actually all customers' deposits.

page 17 describes the process of bank-deposit-creation, however i think it's inaccurate to say in the quote above that three million has been added to the total money supply. One needs to look at where the money came from in the system and where it goes.

Wed, 2010-09-29 08:43

#73

thanks

siamdave, the work involved in any typical home is service for others.

the work involved on any typical farm is service as well.

otherwise home managers buy food and services from the market:

If labour in the market is 'rewarded' with credit, labour in the home ought to be similarly.

Perhaps you are thinking of an individual in a city apartment who lives alone and does no family/social/community services.

I'm not sure that picture even exists.

There used to be a Canadian Association of Home Managers that explained the issues specific to the Canadian context. It wasn't online previously although it had good print material.

Wed, 2010-09-29 10:53

#74

thanks

hopefully rabble keeps those offensive ads off.

___

I did want to note an interesting quote from William Henry Pope, in his book 'All you must know about economics' 2nd ed. p.25.

"A farm's production consumed at home is given an imputed value by StatsCan and is counted in GDP. But this is an exception to the rule that GDP measures the total market value. Most activity that does not have a price is not counted."

A substantial portion of work done by farmers boosts the nation's accounts, but not farmers' own accounts !

If farmers themselves got credit for this portion of their work, that credit would circulate in the economy and improve the economy.

Wed, 2010-09-29 13:28

#75

donOld

thanks wrote:

My understanding is that a bank creates a deposit at the same time it creates a loan

You are correct, but the deposits that are created when the loan is approved do not necessarily stay with the same bank. If the borrower spends the loan money and the seller uses a different bank, then the deposit flows to the seller's bank.

Thu, 2010-09-30 02:03

#76

donOld

This movie, due out in October, is really going to stir things up... http://movies.yahoo.com/movie/1810157411/trailer

Also, here's an interesting example of an already existing, interest-free (almost), bank... http://www.youtube.com/watch?v=aW2pj109Cr8&NR=1

Sat, 2010-10-09 02:08

#77

donOld

siamdave, I finally finished reading your posting at http://www.rudemacedon.ca/what-happened.html

You've done an excellent job. It's a hearty read, covering all of the important bases. The question, as always, is what do we do next. As you suggest, informing our families, friends and neighbours is a great first step. Generating awareness in our local communities is a much bigger, but doable, second step. I wish that we could start a chain of educational movie cafes from coast to coast that would shout out the message about how we have been mislead and coerced into the P.I.T. (of profit, interest & taxes). I think regular showings of the best movies and videos about money, debt, credit, capitalism, profits, usury, etc. in a shared social space might help people feel less alone and helpless. Discussions and creative ideas and actions could follow. Just imagine how many people we could reach if Tim Horton's showed our videos all week long...

Mon, 2010-10-18 14:09

#78

thanks

http://www.monetaryreform.com/MR/TBYL/Chpt4.pdf is full of inconsistencies;

the presence of shareholders contradicts the principle of time credits for work,

'production' continues to be associated with polluting industry,

etc.

use of the term 'sustainability' along with a picture of the earth is advertising for the site and book, not supported in content.

very disappointing.

i'm not going to read any more of monetaryreform.com .

Tue, 2010-10-19 01:22

#79

donOld

thanks wrote:

http://www.monetaryreform.com/MR/TBYL/Chpt4.pdf is full of inconsistencies;

the presence of shareholders contradicts the principle of time credits for work,

I wrote Take Back Your Life between 1994 and 1996. It is a completely separate idea from "A Better Way". I never intended there to be any consistency between the two because my knowledge and opinions have changed in the 15 years since the book. There is still a wealth of useful information in the book, however, so I have chosen to leave it on my web site. Although "Take Back Your Life" proposes an entirely different monetary solution that de-links income from labour completely, it is consistent with my primary objective which is to get people to start thinking for themselves about what the creative possibilities for a better future might truly be.

Quote:
...use of the term 'sustainability' along with a picture of the earth is advertising for the site and book, not supported in content.

The picture of the earth was a very appropriate backdrop for the message that appears to its left. That's all it was intended to be. I'm not advertising anything, everything is free, and your remarks are actually quite insulting.

Credit Reform

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