[GJM] Shakespeare's theory
Mary Fee
mary at letslink.org
Tue Mar 25 06:41:00 MDT 2008
I'll look forward to it.
..M
>I've copied Chris Cook's March 23, 2008 email
>below this latest one from Rodney Shakespeare.
>
>Somehow, Binary Economics has got to join forces
>with Open Capital. They are complementary, and
>would help capital finance for a lot more people
>NOW. We wouldn't have to wait years for federal
>legislation like the Capital Homesteading Act in
>the U.S. or Britain (other parts of the globe;
>Canada, Australia, etc.) to politically succeed
>in order to help millions of people to begin to
>earn equity in productive capital assets they
>use everyday at corps (or LLCs) that they work
>at.
>
>Old-style, bank debt financing of assets will go
>the way of the dinosaurs. It's extremely
>expensive, unproductive and puts WAY to much
>power in the hands of bankers, other lenders and
>government bureaucrats.
>
>Just because you have disposable money doesn't
>mean you have the right to own (and control all
>stakeholders) when you bring your money to a
>capital venture. Money is just one tool that a
>successful economic enterprise needs to function
>properly at creating wealth.
>
>I know it's ironic, the awful word -- rent --
>being properly and justly applied to anyone or
>thing. In the case of money people, it's proper.
>But all the other stakeholders -- workers,
>customers, vendors, etc., would NOT be rented,
>and would be full partners in building equity
>ownership stakes, and sharing power
>proportionately.
>
>If I can ever find the time, I'll start trying
>to hammer out a white paper juxtaposing the two
>models to show how compatible I believe they are.
>
>Regards,
>Steve Nieman
>~~~~~~~~~~~~~~~~~~
>
>On Mar 24, 2008, at 2:43 PM, Rodney Shakespeare wrote:
>
>>Peter,
>>1. Home loans -- $100,000 to $300,000
>>a) You naturally assume inflation because you
>>have to. Inflation is caused by the present
>>banking system which has to create more and
>>more interest-bearing money if the system is
>>not to collapse (which it eventually does).
>>However, even if there is no inflation, the
>>repayment would (depending on the precise terms
>>etc) still be about $200,000. That's at least
>>$80,000 too much ($20,000, for administration).
>>b) You say that people should own their own
>>homes (agreed) yet when binary economics (at
>><http://www.binaryeconomics.net>www.binaryeconomics.net)
>>proposes interest-free loans for homes (which
>>would allow more and more people to own homes)
>>your inherent tendency to wild language causes
>>you to allege that my "crank theory" (the 0%
>>loan) is aimed at disparaging home ownership.
>>A little quiet reflection will enable you to
>>realise that 0% home loans would increase home
>>ownership and it will be helpful if you
>>specifically acknowledge that.
>>2.. My "sublime ignorance"
>>Goodness me, that inherent tendency to wild
>>language is appearing again. Not only are you
>>accusing me of "sublime ignorance" but you are
>>revealing your own ignorance ignorance of the
>>Soviet system -- they certainly did not want
>>people owning their homes. Worse, you are being
>>deliberately ignorant about binary economics
>>which (as everybody knows, except you) wants
>>home ownership and productive capital ownership
>>for everybody. Yes, everybody. However, in your
>>book, no doubt, that is communism. Please
>>confirm.
>>3. Margrit Kennedy
>>Margrit Kennedy, Interest and Inflation Free
>>Money (1995) points out that interest affects
>>virtually everything in a large way (I think
>>she says something about 50% of the cost of
>>goods and services) and that 80% of the
>>population, overall, lose from interest; 10%
>>are even; and 10% gain.
>>I mention these figures to encourage you to
>>re-think your idolatry of the institution of
>>interest.
>>4. Creation of interest-bearing money
>>insufficient to repay principal and interest
>>becasue only principal created.
>>Many authors (e.g., Ellen Brown, Web of Debt;
>>Bernard Lietaer who helped design the Euro)
>>refer to this. Since 97%+ of the new money
>>supply is created as debt by the banks (and
>>there are plenty of quotes to support that
>>including the Reserve Bank of Chicago which
>>also makes it clear that banks do not lend
>>deposits) it is a matter of simple mathematics
>>that if $1000 is created at, say, 10% over five
>>years, that means up to $500 interest is paid,
>>and the total to be repaid up to $1,500 but
>>only $1,000 has been created. So repayment of
>>the $500 is impossible without further creation
>>of interest-bearing money and so
>>on..........The impossibility results from the
>>combination of the 97% figure and the addition
>>of interest but no creation for interest. Have
>>you, as a responsible USA citizen, noticed the
>>present (and sharply rising) levels of USA
>>debt? Who do you blame? The fairies?
>>Rodney Shakespeare.
>>
>~~~~~~~~~~~~~~~~~~~~~
>
>
>Begin forwarded message:
>
>>From: chris cook <<mailto:cojock at hotmail.com>cojock at hotmail.com>
>>Date: March 23, 2008 5:34:32 PM PDT
>>To: Discussion Forum for Global Justice
>><<mailto:discussion at globaljusticemovement.net>discussion at globaljusticemovement.net>
>>Subject: Re: [GJM] William Ryan
>>Reply-To: Discussion Forum for Global Justice
>><<mailto:discussion at globaljusticemovement.net>discussion at globaljusticemovement.net>
>>
>>William
>>
>>> Fine. But what you're saying, Janos, is that
>>>posts containing ad hominem attacks against me
>>>will be
>>> accepted. There have been several in rapid succession.
>>
>>Janos has, I am sure, drawn the same conclusion
>>as everyone else as to the identity of Peter
>>Hogwood after reading Peter Hogwood's first
>>post on IJCCR immediately following the
>>rejection by the moderator of all three of
>>William Ryan's three existing IJCCR email
>>addresses
>>
>>> > As for myself, this is my final posting.
>>> >
>>> > I depart the loony bin.
>>
>>Your "final" posting, when Peter Hogwood had
>>never made a previous IJCCR post? I rest my
>>case.
>>
>>All of this detracts from the first rate response you just made to Rodney.
>>
>>I agree with your analysis of the existing
>>system: however, I differ from both you and
>>Rodney in terms of your assumptions and the
>>consequences of them.
>>
>>Your assumption appears to be that Credit is
>>Money; ie Money is an Object or Token. As I
>>understand Social Credit such was Colonel
>>Douglas's assumption.
>>
>>In my view Money is a Relationship, not an
>>Object, and Credit - or "time to pay" - is
>>implicit in this relationship, which also
>>requires an abstract Value Unit.
>>
>>Wherever there is a barter network, such as the
>>WIR, or proprietary systems such as Bartercard,
>>where credit is granted bilaterally from seller
>>to buyer, then the result is a monetary system
>>requiring a Value Unit. This is essentially the
>>"Clearing Union" as advocated by Keynes at
>>Bretton Woods.
>>
>>So while Credit may be Money, created privately
>>by credit institutions/Banks, or publicly by
>>Treasuries, it need not be Money.
>>
>>Such "Money as Debt" (whether created by
>>Private Banks, Central Banks or Treasuries) is
>>only one of the financial claims that together
>>comprise "Financial Capital".
>>
>>The other financial claim is "Equity" typically
>>that comprised in shares with Par Value (eg
>>£1.00) in a Joint Stock Limited Liability
>>Company - the "Corporation".
>>
>>This entity is so engrained in our
>>consciousness that the very distinction between
>>"Public" and "Private" assumes the latter to
>>mean "owned by a Corporation".
>>
>>But that need not be the case.
>>
>>There is no reason at all why public assets
>>should not remain in public ownership and
>>rights to the production or use value of these
>>assets sold to investors by "unitising" them
>>through the use of trust or partnership-based
>>vehicles instead of Corporations. Indeed
>>Canada's capital market - as you will know - is
>>now divided between conventional listed shares
>>in Corporations, and listed "units" in gross
>>Corporate revenues through "Income Trusts".
>>
>>This opens up the possibility of "unitisation"
>>into redeemable units of production/ use value
>>denominated not in "Money as Debt" but in (say)
>>kilowatt hours, or square metre days.
>>
>>I believe that this technique of "asset-based"
>>financing (based upon ownership as opposed to a
>>"deficit-based" claim over someone else's
>>ownership) opens up new forms of "fungible"
>>"money's worth" with a value in exchange, and
>>that this exchange will take place on a
>>"Clearing Union" platform.
>>
>>Banks as Guarantors
>>Credit is a necessary part of the Monetary
>>process, and credit or "time to pay" has no
>>cost in itself. The true economic function of a
>>credit intermediary - aka a Bank - is in fact
>>its implicit guarantee of the borrower's credit.
>>
>>A Bank's "interest" charge covers - as you
>>accurately analyse - the "interest" it pays to
>>(equal and opposite) depositors, its operating
>>"costs" (in "money's worth" of labour, energy,
>>goods, whatever), and any default costs. It
>>then hopes to make a "Profit" for the benefit
>>of its rentier shareholders.
>>
>>A Bank's implicit guarantee is backed by
>>regulatory capital set by the Bank of
>>International Settlements in Basel.
>>
>>The problem has been that Banks have been
>>routinely outsourcing this guarantee:
>>
>>(a) permanently - through "securitisation";
>>
>>(b) temporarily - through credit derivatives; and
>>
>>(c) partially - through credit insurance by "monoline" insurers;
>>
>>resulting, when mixed into toxic cocktails of
>>structured products, in the current "Credit
>>Crash".
>>
>>An Alternative Financial System
>>The solution I advocate, and am working to
>>introduce, comprises two mechanisms, neither of
>>which requires legislation.
>>
>>Firstly, a mutualised guarantee of bilateral
>>credit. This guarantee would be backed by
>>provisions made by both Buyer and Seller
>>(analogous to Keynes' proposal that payments be
>>made in respect of positive and negative trade
>>balances of "Bancors") of "money's worth" into
>>a "Default Pool".
>>
>>A Service Provider (ie a bank) would no longer
>>put its proprietary capital at risk, but would
>>manage credit creation (by setting guarantee
>>limits) and also manage defaults, and operate
>>the accounting system of this "Guarantee
>>Society". It would be paid for this service, of
>>course.
>>
>>Secondly, conventional secured credit would be
>>replaced by investment in land, energy assets,
>>and other productive assets by "unitising" and
>>selling forward the production into redeemable
>>units, and these would be shared proportionally
>>between the financiers and the users of the
>>finance in what I call a "Capital Partnership".
>>
>>A bank's role here is that of an "Investment
>>Bank", bringing investors together with
>>investments - a "service provider" , again
>>neither creating credit nor putting capital at
>>risk to do so.
>>
>>In the case of a Guarantee Society, the
>>accounting requirement is for a "Shared
>>Transaction Repository", or database of
>>Accounts Receivable and Accounts Payable: in
>>the case of a Capital Partnership, the
>>requirement is for a "Shared Title Repository".
>>
>>In neither case is there any "profit" or "loss".
>>
>>A Guarantee Society is therefore banking
>>without the bank as intermediary, and operating
>>on a "Not for Loss" basis.
>>
>>Capital Partnerships allow the possibility of
>>direct investment in productive assets, with
>>the possibility of the creation of a "National
>>Equity" consisting of the networked pool of
>>productive assets, and a "National Debt"
>>consisting of the networked pool of mutualised
>>credit.
>>
>>Such is my analysis. You may consider it
>>"wacky" and that is your privilege, but it
>>based upon actual knowledge and experience, up
>>to and including the highest level, of global
>>market operations, for what that's worth.
>>
>>Best Regards
>>
>>Chris Cook
>>
>
>
>
>
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