JCT: Okay, Daniel, by now you see that there's a problem
when you borrow from a bank that does not occur when you
borrow from a neighbor. When you borrow from the neighbor,
he can let you live by spending some money into circulation
or he can make you bankrupt by refusing to spend some. With
a bank, it's different. You must go broke. Bill Ryan aka
Silas Kline aka Peter Hogbreath aka Myro says there's a way
but could never produce a loan payment schedule. It hasn't
stopped him from shooting his mouth off though:

>Subject: [ijccr] Digest Number 1960
>Re: TURMEL: #4 Daniel Reeves says interest is simple but
>by: "Myro Ashenopolitus" new_economics@...
>Date: Fri Aug 10, 2007 8:44 pm ((PDT))

"JCT: I've drawn those flows at my bankmath page. Yes,
they spend the interest they take in. Fortunately,
that's not the bet. My bet is that the there is no
possible payment schedule for a debt with interest to
be paid off without recourse to outside money. So if
you want to add another Paypal US hundred to Reeves'
bet, I'll fade you."
---
M: But it's not "outside money," John.

JCT: The bank issued 10 onto the island, the bank got back 5
from the island. There's only 5 left on the island. If it's
not coming in from the outside, where is it coming from?

M: But that's how you win your bet? Excluding the money that
the bankers spend back into circulation for salaries,
dividends and ordinary business expenses, with this card up
your sleeve, like the cheater that you are? That's
"bankmath"? Har Har Har Nyuk Nyuk Nyuk! You've lost the bet,
and the whole world can see. Live with it. Myro

JCT: The Banking Systems Engineer lost the bet? All you have
to do is go to watch the financial flows at the blueprint at
http://www.cyberclass.net/turmel/bankmath.htm to know I'm
right. Still, don't get too excited thinking that someone
else has finally won my bet which you were never able to do.
---

>Posted by: "Marc Gauvin" gauvin@... marc_gauvin
>Date: Sat Aug 11, 2007 12:05 am ((PDT))

MG: Myro, Take any standard bank loan schedule that uses
compound interest and show that with the principal issued
for that loan you can pay both principal + interest. I used
a standard spread sheet that you can find at
http://tech.groups.yahoo.com/group/ijccr/files/ it is the
file called Ryan's example.xls. All I did is to overlap the
same schedule so that a second loan starts at repayment
period 6 and ends 6 periods after the first as requested by
Mr. Ryan , I also added a column showing the remaining
balance in circulation after each principal payment of the
original payment and added the principal created in the
second loan.
The conclusion was that without new money and on the basis
of only the principal issued for those loans there is not
enough to pay both principal and interest even assuming that
100% of interest payments are made immediately available to
the system as is the case with the spreadsheet as it only
subtracts the principal paid not the interest, thus assuming
that the money created by the principal where ever it may be
in reality is available until and only until it has been
used to pay principal.
This is sufficient to prove John's point as he intends.

JCT: Bill "Myro" Ryan has never been able to provide a
payment schedule for his bank loan because Marc has.

MG: What is outstanding, is:
1) A clear explanation of how any money other than that born
of interest bearing debt is created and put into circulation

JCT: Ryan says bank spendings are new credits. I'd think
that would get them busted. Doesn't my poem say:
But if you printed to spend, the others would bewail,
They're call it counterfeiting and send you off to jail.
But what if government would let you print it up to lend,
With only what you can collect in interest to spend."
As my blueprint shows. Myro/Ryan says there's another pipe
from the tap issuing out from the banks as bank spendings
where I have bank spendings issuing out of the reservoir.
So, are bank spendings linked to the reservoir as I've drawn
or are they linked to a tap of new money as Ryan says.

MG: 2) How we can be sure that the amount of money created
in 1) above is sufficient to satisfy all the deficit created
by interest in all circumstances and across all loans at all
times.

JCT: The Social Credit Solution of issuing enough debt-free
money to balance the extra debt sure does entail a lot more
work and supervision that not letting the extra debt happen.

MG: 3) Answer the question why in heaven's name is it so
important to complicate everyone's life with interest and
the fine tuned expensive management and overhead not to
mention risk that performing 2) above entails? Look forward
to your response. Best Marc

JCT: Bet he'll never be able to have a good answer for
having the poor continue paying interest to the rich.
---

>Posted by: "John C. Turmel" bc726@...
>Date: Sat Aug 11, 2007 6:42 am ((PDT))

--- Myro Ashenopolitus <new_economics@...> wrote:
> But it's not "outside money," John. But that's how
> you win your bet? Excluding the money that the
> bankers spend back into circulation for salaries,
> dividends and ordinary business expenses, with this
> card up your sleeve, like the cheater that you are?

Jct: Knowing how the bank flows really work is cheating?
It's winning, but not cheating.

> That's "bankmath"? Har Har Har Nyuk Nyuk Nyuk!

Jct: You never put up your money so who's still laughing?

> You've lost the bet, and the whole world can see.
> Live with it. Myro

Jct: Certitude from the guy who can't put the money
where his mouth is? Har Har Har Nyuk Nyuk Nyuk!
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Sat Aug 11, 2007 3:39 pm ((PDT))

M: Marc, your conclusions don't follow from your
spreadsheet, which is a simple compilation of two
overlapping loans. Your error is assuming that remaining
principal is equal to the money in circulation, whereas the
money in circulation equals the remaining principal plus the
money the banks have spent into circulation during the
accounting period for salaries, wages, dividends, and
ordinary business expenses.

JCT: He says bank spendings come from a tap, not the
reservoir. Wanna bet?

M: During the very last period, the remaining principal from
the preceding period, plus the salaries, wages, dividends,
and ordinary business expenses spent by the banks during the
last period, exactly equal the principal plus interest due
to be paid at the end of the last period. Myro

JCT: The Social Credit movement proposed that the Government
spend new money in this way, debt-free, to solve inflation
and unemployment. Now pseudo-Socred Bill "Myro" Ryan says
that the banks are effecting the social credit solution of
balancing the lack of money repay both Principal and
Interest when all were only loaned the Principal by spending
new money into circulation debt-free. I've already agreed
that this Social Credit balancing act would work. I've only
pointed out that eliminating the imbalance at the start
eliminated the need for a balancing act at all. But Ryan now
argues that the banks have been using the Social Credit
solution all along, spending enough into circulation to
solve inflation and unemployment. Har har har har. Since we
still have inflation and unemployment, the social credit
solution can't be being used.
---

>Posted by: "Daniel Reeves" dreeves@... pegarmpaul
>Date: Sat Aug 11, 2007 10:53 pm ((PDT))

> So anyway, I'm prepared to PayPal any bets made. As soon
> as Daniel, Graeme or Myro say "bet," I'll provide the
> stumbling block to stump them."

DR: (for the 3rd time) "bet!" Graeme declined to hold my
US$100 in escrow but I'm good for it regardless. But it
sounds like you're backpedaling on the voting idea you
proposed. How else will the bet be resolved? In any case,
I'm glad to hear you respect my solution attempt (actually
more a concrete-ifying of someone else's response) and am
certainly curious what you think is wrong with it.
---

>by: "John C. Turmel" bc726@... johnturmel
>Date: Sun Aug 12, 2007 7:45 am ((PDT))

--- In ijccr@yahoogroups.com, "Daniel Reeves" wrote:
> (for the 3rd time) "bet!" Graeme declined to hold my
> US$100 in escrow but I'm good for it regardless.

Jct: I just want to make sure you understand that you're not
borrowing the loan from your mother but from a bank. We're
discussing how the banking program malfunctions, not how
your mother could accept the interest in kind.

That's why I originally said you'd get the loan from a
bank ATM. We're discussing banking, not lending. If you
understand that you will be borrowing from a bank, and
let's say it's in Mexican Pesos, and making your payments
to the bank, even with your mama as bank manager to want
to help you for sure, then we can bet because we will end
up with a recorded payment schedule, as required to win
the bet because it's what the banksters can't do or
bet on no matter how much Myro and the moles support your
effort. So, for the fourth time, it's a bank loan under
banking lending rules. Bet?
---

>by: "Myro Ashenopolitus" new_economics@...
>Date: Sun Aug 12, 2007 8:02 am ((PDT))

M: It's not banking lending rules as you allege them to be,
John, but as they actually are. Har har har. Nyuk nyuk nyuk!
Myro

JCT: Yes, another typical Ryan zinger. But until he proves
that the bank spendings don't come from the reservoir and do
come from the tap, I think I'll stick with how it's
explained in economics textbooks where none mention that
bank spendings are cause an increase in the money supply.
If bank spendings increase the money supply to make the
interest payable, somewhere, someone would have mentioned
it. Bet no one has because William B. Ryan's wrong again.
Also, notice how he can't show his face over at USENET any
more after making a fool of himself with a couple of years
of piss-boy posts he can't now stop.
---

>harnyuk Re: [ijccr] Re: TURMEL: #4 Daniel Reeves says
>Posted by: "ernie yacub" ernieyacub@... ernie_yacub
>Date: Sun Aug 12, 2007 9:08 am ((PDT))

EY: why don't you guys take this bullshit somewhere else? it
has absolutely nothing to do with cc, as in ijCCr, and it's
not even entertaining. it amazes me to no end that the
International Journal of Community Currency Research hosts
an egroup that diminishes it's reputation with every message
posted in this and numerous other similar threads in the
past. imagine a newbie trying to learn something about cc
going through the archives. har har har indeed ey

>Posted by: "John C. Turmel" bc726@...
>Date: Sun Aug 12, 2007 12:42 pm ((PDT))

> why don't you guys take this bullshit somewhere else?

Jct: Why can't you help yourself from reading it if it's so
not entertaining? And just because Ernie can't see why no
interest makes Community Currencies work doesn't mean others
aren't interested in learning how it relates to its
engineering efficiency. As for what a newbie can learn about
poker chips, reading Ernie's plaints doesn't contribute
much. The contribution from someone whose only input is try
to prevent others from reading what he doesn't want to read
is pretty dull. Of course, that's why Ernie's so in favor of
cancelling the ijccr discussion group with stuff Ernie
doesn't like to discuss and doesn't want anyone else
discussing either.
---

>Posted by: "Daniel Reeves" dreeves@... pegarmpaul
>Date: Sun Aug 12, 2007 9:51 am ((PDT))

DR: But what about the vote? Like you originally suggested,
we need some specific outcome to bet on. If it's "will John
eventually wear Daniel down with interminable physics
analogies", I don't like those odds! :)
It sounds like your counterargument is going to be that my
payment schedule depends on the bank spending the money as
you pay it back. That's true. But if it doesn't, that's even
better for the borrower (they're "in debt" forever but
there's nothing the bank can do about it).

JCT: Taking your pledged collateral isn't what I'd call
"nothing the bank can do about it.

DR: Can you construct a "desert island" scenario where a
sneaky lender does a savvy borrower any actual harm?

JCT: I did. I said that you borrowed Mexican pesos at
interest from your mother's ATM on your island and then you
do your best to pay it off to your ATM. By now, you've seen
the banking dilemma that wouldn't exist if your mama could
hold on to your payments.
---

Re: TURMEL: #4 Daniel Reeves says interest is simple but
by: "John C. Turmel" bc726@... johnturmel
Date: Sun Aug 12, 2007 12:44 pm ((PDT))

--- "Daniel Reeves" <dreeves@...> wrote:
> But what about the vote?
Jct: Sure, settle the vote right after we settle the bet.
---

>Posted by: "marc_gauvin" gauvin@... marc_gauvin
>Date: Sun Aug 12, 2007 3:57 pm ((PDT))
Myro, Shows us with a spreadsheet where the banks get the
money from that they spend. Note that the spreadsheet
(http://tech.groups.yahoo.com/group/ijccr/files/ it is
"Ryan's example.xls") only removes principal as it is paid
not the interest so that the interest payments remain "in
circulation" and as such it is assumed that the banks spend
100% of the interest back. So if there is more than the
principal where does it come from? How do the banks get it?
Finally, if it is the old create money out of nowhere that
counts as new money. Thanks, Marc

JCT: Easier to ask if the Bank Expense pipe is connected to
the Reservoir or to the Tap.
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Mon Aug 13, 2007 6:15 am ((PDT))

You are mis-describing your own spreadsheet, Marc. It does
not demonstrate what you think it demonstrates. It is simply
a rendering of two overlapping amortization schedules that
shows a zero balance at the end. Exactly as what is expected
in amortization schedules. Nowhere does it show the money
the banks are spending into circulation for salaries, wages,
dividends and ordinary business expenses as functioning
members of their community.

JCT: His magic financial flow to the rescue. My blueprint
shows that bank spendings from from the reservoir of
existing money, not the tap of new money. No Economics
textbook says the bank can print it up to spend.

M: Therefore the principal depicted as remaining due
throughout the schedule does not depict the totality of
money in circulation at each point in time, which includes
what the banks are lending into circulation, plus what they
are spending into circulation.

JCT: It really all does boil down to whether bank expenses
are spent from the reservoir of existing money or from the
tap of new money. I bet $100 reservoir. Myro will back down.
Need anyone say more?

M: It is really a very simple fallacy. And, where do the
banks get it? They get it from the same place as the money
they lend into circulation.

JCT: Is bank expenses also linked to the same tap as the
money they lend into circulation or from the reservoir. I
bet Myro's wrong.

M: Which is from their ability to credit their own liability
accounts, in this case, their customers' deposit accounts.

JCT: To debit a customer's account is to increase it. To
credit it is to decrease it. So, is it true that
they have the ability to decrease their customers' accounts
without having to put it back?

M: We call these credits money because they are generally
acceptable in transactions. Myro

JCT: If it were only true, they could easily end inflation
and employment, even bank panics, just by spending new money
into circulation. Har har har har. A history of bankruptcies
and only failure to buy something to get money into people's
accounts.
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Tue Aug 14, 2007 7:58 am ((PDT))

Myro wrote:
> No, because you're operating under the false
> assumption that the principal of loans constitutes the
> totality of money in circulation, whereas the actual
> fact is that the money in circulation also includes
> the money that the banks are spending into circulation.

TC: My understanding is that it is completely illegal for a
bank to "create" new money to pay its bills.

JCT: If you printed it to spend, the others would bewail,
They'd call it counterfeiting and send you off to jail.

TC: When a bank creates money by lending, the backing for
that new money is the collateral put forward by the
borrower. New dollars created to pay bills would not have
that backing, hence it being impermissible. If that isn't
what you are referring to, then I suppose are referring to
delay of payment -- as discussed below.

> The truth of the matter, in a normally expanding
> economy, the banks, like every other sector, are
> actually spending MORE into circulation, in salaries,
> wages, dividends and ordinary business expenses, than
> they are taking back through sales, which, in the case
> of banks, would be fees plus interest on loans. Yet
> they are recording a profit. That's how double entry
> accounting works in the macroeconomy. Transaction
> accounts are accumulating throughout the economy.

Companies that *consistently* spend more then they earn go
bust. They can do it in the short term by getting credit
terms from their suppliers, which is what your accrual
accounting graph shows. The problem with your argument is
that you have widened the argument to pretend that the
quantity of circulating media of exchange includes bi-
lateral commercial credit. This is false.
The heart of the issue of community currencies is
exploration of all possible variants of formalizing bi-
lateral commercial credit into de-centralized, autonomous,
multi-lateral, complementary media of exchange. Given that,
your argument is cynically dishonest in the context of this
forum.

JCT: Cynically dishonest is gentle.
---

>Posted by: "Todd Boyle" tboyle@... toddboyle
>Date: Tue Aug 14, 2007 9:39 am ((PDT))

At 08:46 AM 8/14/2007, you wrote:
>My understanding is that it is completely illegal for a ban
>to create new money to pay its bills. When a bank creates
>money by lending, the backing for that new money is the
>collateral put forward by the borrower. New dollars created
>to pay bills would not have that backing, hence it being
>impermissible. If that isn't what you are referring to,
>then I suppose are referring to delay of payment -- as
>discussed below.

TB: Commercial bank borrows from the fed on its own account,
at the discount rate, and makes a profit from the spread
when it lends at a higher rate.

JCT: But they're creating new money, not lending out old
savings, new credits, not old. Standard Economics error to
think that loans are newly created money to be lent out and
at the same time think they lend out their old deposits!
---

>by: "Myro Ashenopolitus" new_economics@...
>Date: Tue Aug 14, 2007 10:23 am ((PDT))

"My understanding is that it is completely illegal for
a bank to 'create' new money to pay its bills."
---
M: Your understanding is incorrect.

JCT: Bet $100 to $10 you can't prove it.

M: Who told you that?

JCT: Economics text books do not. Who told you?

M: The bank's requirement is to redeem deposits with legal
tender on demand. To meet anticipated demand for legal
tender, they keep fractional reserves against deposits,
allowing credit to expand with the needs of trade and
commerce.

JCT: Notice he didn't answer where it says banks can take
money from the tap instead of the reservoir.
---

[CONTINUED]

--
Abolitionist Debt Slave Leader John C."The Banking Systems Engineer"
Turmel for UNILETS interest-free time-based currency in U.N. resolution
C6 to Governments in the http://www.un.org/millennium/declaration.htm
http://www.cyberclass.net/turmel USENET blog: alt.fan.john-turmel