[GJM] Replying to Peter Challen
Myro Ashenopolitus
new_economics at yahoo.com
Sat Jan 19 09:47:36 MST 2008
[Shakespeare] "You have made a most extraordinary
statement. If true, is there anything which stops the
banks creating as much money as they like for any
purpose they like?"
----------------------------------------------------
Individual banks are profit-loss institutions. The
money they create are their individual liabilities,
which they are required to redeem in legal tender on
demand. An individual bank that is more profligate
than its competitors in creating money for reckless
purposes is thereby going to lose reserves to its
competitors, and go out of business eventually. But
there is nothing whatsoever preventing the banking
system as a whole from creating as much money as it
likes for any purpose it likes. This is why a
dictatorship that gains absolute control over its
nation's banking system has the power to utterly
destroy its nation, like, for example, Zimbabwe, which
got to the point where its money became so worthless
that it couldn't even purchase the ink needed to print
new bank notes.
-
[Shakespeare] "As regards an international contract
having compound interest (you deny such things exist
and ask for an example) I refer to President Obasanjo
of Nigeria in 2000. Commenting on his country's debt
to international creditors, he said:-
'All that we had borrowed up to 1985 or 1986 was
around $5 billion and we have paid about $16 billion
yet we are still being told that we owe about $28
billion. That $28 billion came about because of the
injustice in the foreign creditors' interest rates.
If you ask me what is the worst thing in the world, I
will say it is compound interest.'"
----------------------------------------------------
This is a rather extraordinary statement. It is
either a fabrication, or Obasanjo had a screw loose
when he made it. I asked you to supply an actual
contract for an international loan that specifies
compound interest, which I take note you have not
done.
There are about a half dozen instances of this
supposed "quote" floating around crank sites on the
Internet. A couple of them say that it was made to
reporters after the G8 meeting in Okinawa, but without
citation to an original "report" from the time, so it
is impossible to verify.
Nevertheless, Obasanjo was a competent enough leader
to have secured a two-thirds forgiveness to his
nation's foreign debt before he left office.
-
[Shakespeare] "Myro, you are being very naughty on
this Islamic fundamentalist business particularly
because what you mean by modern 'reformists' is
Islamic Banking which, as I have explained briefly, is
only a version of conventional banking."
----------------------------------------------------
I take note that you continue to ignore and fail to
respond to my original point about the difference
between the Arabic words in the Quran, fa'eda, meaning
interest, and reba, meaning usury in my initial
posting to this thread:
http://www.submission.org/islam/interest-usury.html
"The Quran forbids usury, not interest. Quite a few
states in USA have laws against usury. Usury is
defined as excessive interest. A Dictionary defines
usury as 'an excessive or inordinate premium for the
use of money borrowed', 'extortionate interest', or
'the practice of taking exorbitant or excessive
interest.' The Arabic language also makes distinction
between interest (Fa'eda) and usury (Reba). The Quran
forbids Reba or usury."
-
[Shakespeare] "I said halving the cost of capital
projects. That is wrong. I should have said thirding
or quartering and if you want me to raise the example
of the Humber Bridge, I will."
----------------------------------------------------
Well, this is a whopper that's going to keep you
permanently excluded from polite company, I think,
because it's so easily demonstrated to be ridiculous.
Yes, please do tell me about the Humber Bridge.
Myro
--- Rodney Shakespeare
<rodney.shakespeare1 at btinternet.com> wrote:
> Dear Myro,
>
> I am pleased to help progress your research.
>
> 1. You say that "some significant amount of the
> money that the banks create
> is not interest-bearing, that which they create when
> they write checks for
> expenditures in the ordinary course of business,
> including dividends to
> their stockholders......."
>
> You say they create money to pay their stockholders?
> Really? That is
> saying they create debt-free non-repayable money to
> pay their stockholders
> because I am not aware that stockholders have to
> repay their dividends the
> next day, or even ever.
>
> You have made a most extraordinary statement. If
> true, is there anything
> which stops the banks creating as much money as they
> like for any purpose
> they like?
>
> What seems to be happening is that you are revealing
> banking practice as
> much more corrupt than ever I thought it to be.
> Please do carry on.
>
> 2. You are a callow youth and have no respect
> for the wisdom which comes
> with age.. Do not try being abusive to me by
> talking about a small clique
> of supporters and obscure and little watched
> television channels. You have
> the support merely of one person -- a slightly mad
> supervisor called Bill
> Ryan who has multiple personalities -- one for each
> day of the week,
> apparently. Does he also wear different coloured
> hats?
>
> Moreover, we at GJM not only have an accurate
> diagnosis of the global
> financial crisis but we have the solution. In
> short, events are moving our
> way and they are not moving in the direction of
> your supervisor and, if
> they did, heaven help the events.
>
> 3. You say "when the banks spend for any purpose
> whatsoever, the money
> supply is increased". This is another remarkable
> statement supporting the
> one above to the effect that the banks can create
> debt-free money for any
> purpose they like. Is this your idea or your
> supervisor's? Frankly, it can
> only be your supervisor's expressed on a day when he
> had called himself
> Hieronymous Bosch or something and was wearing a
> purple cap.
>
> 4. As regards an international contract having
> compound interest (you deny
> such things exist and ask for an example) I refer to
> President Obasanjo of Nigeria in 2000. Commenting
> on his country's debt to
> international creditors, he said:-
>
>
>
> "All that we had borrowed up to 1985 or 1986 was
> around $5 billion and we
> have paid about $16 billion yet we are still being
> told that we owe about
> $28 billion. That $28 billion came about because of
> the injustice in the
> foreign creditors' interest rates. If you ask me
> what is the worst thing in
> the world, I will say it is compound interest."
>
>
> 5. Myro, you are being very naughty on this Islamic
> fundamentalist business
> particularly because what you mean by modern
> "reformists" is Islamic
> Banking which, as I have explained briefly, is only
> a version of
> conventional banking. Kindly take your guidance
> from me in this matter and
> not from your supervisor Bill Ryan, particularly on
> Fridays.
>
> 6. I am very glad to see you have had a look at the
> diagram at
> www.binaryeconomics.net. Unfortunately your
> understanding of it is probably
> as bad as your supervisor's and I just say there
> are no boards of
> supervisors. I suggest you do a little more proper
> research -- that means
> reading big books, Myro, and not just pressing
> computer buttons which you
> (and, believe me, your supervisor) are very good at.
>
> 7. I said halving the cost of capital projects.
> That is wrong. I should
> have said thirding or quartering and if you want me
> to raise the example of
> the Humber Bridge, I will.
>
> 8. I asked you to give my compliments to your
> supervisor. Did you do it?
> And what sort of hat was he wearing?
>
> Rodney Shakespeare.
> ----- Original Message -----
> From: "Myro Ashenopolitus" <new_economics at yahoo.com>
> To: "Rodney Shakespeare"
> <rodney.shakespeare1 at btinternet.com>; "Discussion
> Forum for Global Justice"
> <Discussion at globaljusticemovement.net>
> Sent: Friday, January 18, 2008 10:36 PM
> Subject: Re: [GJM] Replying to Peter Challen
>
>
> > [Shakespeare] "There is no need to expand on this
> any
> > more. The banks create huge amounts of money --
> ALL
> > of it is interest-bearing -- and the only way your
> > reply makes sense is if the banks create more and
> more
> > such money and so there has to be more and more
> debt."
> >
>
------------------------------------------------------
> >
> > In two previous postings I've demonstrated that
> this
> > is a false assertion. Some significant amount of
> the
> > money that the banks create is not interest
> bearing,
> > that which they create when the write checks for
> > expenditures in the ordinary course of business,
> > including dividends to their stockholders, which
> > becomes available to the general community to pay
> > interest back to the banks. It is not simply
> rhetoric
> > that the economy is a wheel of commerce, Rodney.
> This
> > is generally accepted by most educated persons, so
> > when you go beyond your small clique of supporters
> to
> > present your ideas outside of obscure and little
> > watched cable channels, if you have the
> opportunity,
> > you're going to have a real problem.
> >
> > [Shakespeare] "Therefore there must be a continued
> > creation of more and more (interest-bearing) money
> if
> > there is not to be a credit contraction overall."
> >
>
------------------------------------------------------
> >
> > This doesn't follow from what I said, which was
> that
> > the payment of interest cancels money, but when
> banks
> > spend for any purpose whatsoever, the money supply
> is
> > increased, enabling interest to be paid back to
> the
> > banks in reciprocal economic activity. The
> receipt of
> > interest and the spending are going on
> simultaneously.
> > Again, it is a wheel of commerce.
> >
> > [Shakespeare] "I do not think you understand the
> > effects of compound interest and, moreover, are
> only
> > thinking of interest at the branch of a local
> bank.
> > What about those huge international loans at
> compound
> > interest?"
> >
>
------------------------------------------------------
> >
> > It is impossible for you to supply even a single
> > example of an international loan contract that
> calls
> > for compound interest, because it simply does not
> > exist.
> >
>
=== message truncated ===
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