[GJM] Shakespeare's theory

Tue Mar 25 17:57:36 MDT 2008

Peter,
 Is this mixture of the banal, the incredible and the unintelligible the 
sort of thing you and Ryan get up to at socialcredit at elistias.com?  Is this 
your version of Social Credit?

1.    Yes, the figures in bank accounts are money which can be spent (even 
though you may have to repay it to the bank).

Yes, when a bank loans you money it puts money into your bank account. (But 
this money is money which must be repaid -- a point which seems to have 
slipped your mind).

Yes, the figures in your bank account can also rise because you or other 
people put money into it. (For Heaven's sake, I can scarcely believe I am 
writing this)

And, yes, the bank all the time creates the money, repayable money, which it 
puts into the bank accounts.

2.    At which point your arms start windmilling and you run off into Raving 
Lunatic Land and, needless to say,  you completely fail to answer the 
question I previously asked.

Yes, the banks put money, repayable money, into bank accounts like mine. 
But when they pay salaries into the accounts of their employees, the money 
is NOT repayable -- it is a debt-free in respect of the employee and the 
question is where did the bank get that money from?  It would have been 
consistent with your previous responses for you to say this money came  from 
the interest/income of the bank.  But you definitely seem to be not saying 
that.

Instead you are saying that the bank is simply creating out of nothing money 
(normally called 'printed money' or some such) which is not repayable.  It 
is simply printing money for itself.  Do you really mean that? It's bad 
enough that the banks create increasing amounts of repayable 
interest-bearing money.  But you are clearly saying that they also create 
large amounts of non-repayable money (for their own benefit).  If I did that 
I would be called a forger.

Is there any school of thought which agrees with what you are saying? 
Indeed, are there any other Social Crediters who agree?

And what on earth do you mean by talking about reciprocal economic activity? 
Where is the reciprocity when one of the parties (the bank) is simply 
forging money?

3.  You then state that, as a statistical matter, firms are always 
disbursing more than they are receiving back through sales, yet they are 
always booking a profit.

This statement only makes sense if you say that firms are able to disburse 
more than they receive back through sales because they are borrowing money 
with which to do it.  So why didn't you say this?  Why don't you have the 
good manners to be clear when there is no problem in being clear?

You then show your gobbledy-gook diagram (which does not show what is on the 
y axis) and  I presume it is the Ryan/Hogwood inversion of Douglas's A+ B 
theorem.  Am I right or  wrong?

4.  You then write this:-
"This is done through accommodation by the banks, whose primary function in 
this system is to exchange their generally recognizable promissory notes in 
the form of deposits for the poorly recognized individual notes of their 
borrowers, making the competitive market in mass production possible."

If you mean the banks lend money, why not say just that?

5.  And you finish with a piece of weirdo goobledy-gook:-
" Since the banks are banks, accommodation by the banks is not necessary for 
the banks."

Is this what Rice University taught you?

Rodney Shakespeare.

----- Original Message ----- 
From: "Peter Hogwood" <p_t_hogwood at yahoo.com>
To: <discussion at globaljusticemovement.net>; <socialcredit at elistas.com>
Sent: Tuesday, March 25, 2008 3:05 PM
Subject: Re: Shakespeare's theory

> Rodney, the concept is very simple and is in full
> accord with the principles of double entry accounting.
> Inasmuch as most transactions in today's economy are
> conducted through the tender of bank deposits, we
> define bank deposits as being money.  It is a
> colloquial term since there are many definitions of
> money.
>
> The theorem is that loans create deposits, which does
> not mean that deposits derive only from loans.  When
> banks net credit deposit accounts for any purpose, for
> loans or whatever, money in the hands of the public is
> therefore being created.  The accounts are liabilities
> of the banks, which are credited not only when banks
> grant loans, but when banks write checks or their
> electronic equivalent for ordinary business expenses,
> also when banks write checks for dividends to their
> stockholders, which makes it possible for the more
> general community to pay interest to the banks.  It is
> reciprocal economic activity in which the banks play
> an essential role.
>
> As a statistical matter, in terms of cash flow in a
> growing economy, firms are always disbursing more than
> they are receiving back through sales, yet are
> continually booking a profit.  See the diagram at
> http://geocities.com/socredus/compendium/accounting_profit.gif
> This is done through accommodation by the banks, whose
> primary function in this system is to exchange their
> generally recognizable promissory notes in the form of
> deposits for the poorly recognized individual notes of
> their borrowers, making the competitive market in mass
> production possible.
>
> Since the banks are banks, accommodation by the banks
> is not necessary for the banks.
>
> Peter
>
>
> --- Rodney Shakespeare
> <rodney.shakespeare1 at btinternet.com> wrote:
>
>> Peter,
>>
>> Your response is an amazing development. You have
>> flabbergasted me -- knocked me clean off my bicycle
>> -- a full boxing point to you!!
>>
>> But please explain exactly what you are saying.  On
>> the face of things you are alleging false accounting
>> or worse by the banks.
>>
>> You say the banks are creating money to pay for
>> their expenses and salaries.
>>
>> 1.    Do you mean that the money is interest-bearing
>> money so that when an employee is paid he has to pay
>> it back again -- plus interest?  I am not joking but
>> am astounded by your statement that  the banks
> create
>> money to pay their employees.
>>
>> 2.    Or do you mean that the banks create debt-free
>> (non-repayable money) with which to pay their
>> employees?
>>
>> 3.    Is your  view one that is generally accepted
>> in some school of economics/finance?
>>
>> I greatly look forward to your explanation because
>> it will give some clue as to the basic position from
>> which you criticise others.
>>
>> Rodney Shakespeare
>>
>>
>> ----- Original Message ----- 
>> From: "Peter Hogwood" <p_t_hogwood at yahoo.com>
>> To: <discussion at globaljusticemovement.net>
>> Sent: Tuesday, March 25, 2008 12:41 PM
>> Subject: Re: Shakespeare's theory
>>
>>
>> > "...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."
>> >
>>
> -------------------------------------------------------
>> >
>> > Rodney, the banks are also creating money when
>> they
>> > spend for ordinary business expenses and pay
>> salaries,
>> > wages and dividends.  Why do you think that the
>> money
>> > the banks create for these purposes is
>> insufficient
>> > for the more general community to pay interest
>> back to
>> > the banks?
>> >
>> > Peter
>> >
>> >
>> > --- Rodney Shakespeare
>> > <rodney.shakespeare1 at btinternet.com> 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
>> >> 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.
>> >>
>> >>
>> >> ----- Original Message ----- 
>> >> From: "Peter Hogwood" <p_t_hogwood at yahoo.com>
>> >> To: <discussion at globaljusticemovement.net>
>> >> Sent: Monday, March 24, 2008 7:35 PM
>> >> Subject: Shakespeare's theory
>> >>
>> >>
>> >> > Rodney, some brief replies below [Reply]:
>> >> >
>> >> > "3.    Home loan -- $100,000 to $300,000 You
>> have
>>
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