>Re: TURMEL: #4 Daniel Reeves says interest is simple but
>by: "Myro Ashenopolitus" new_economics@...
>Date: Tue Aug 14, 2007 11:44 am ((PDT))

"In the spreadsheet ALL of the principal issued remains in
circulation until used to make principal payments where it
is erased. You say that that sum is not all the money in
circulation and that there is more. I request that you show
us how and where that extra money comes from."
---
As I've already told you, it derives from their ability to
credit deposit accounts, the same as they do when they grant
loans.

JCT: They can get deposits not called loans from the tap?
Prove it.

MG: "Note, that by saying that the principal is not all
the money in circulation you are unwittingly admitting
that the principal is insufficient to pay both
principal and interest and that more is needed."
---
Of course the principal is insufficient.

JCT: So, once it's admitted that the bank expenses pipe is
not connected to the tap of new money but to the reservoir
of old money, "Of course the principal is insufficient."

M: Okay, let's look at your spreadsheet. I've told you
that it needs a column to show the amounts being spent
into circulation by the banks.

JCT: Don't just say it. I bet you can't cite one book, one
spreadsheet.

M: Presumably, the principal or "balance" columns represent
the money being spent into circulation by the non-banks, and
the amounts being left in circulation from that spending
after each principal payment back to the banks.

JCT: Or, in my blueprint, disconnect the bank expenses from
the reservoir and connect it to the tap.

M: To calculate the money in circulation, you would have
to add a column indicating the money the bank has
spent into circulation...

JCT: If repetition made it so. How lucky we must be that
they provide enough money to completely settle the debt, to
eliminate inflation and unemployment. How lucky it works so
well.

M: I will assume that the amount that the bank has spent
into circulation during the first period is at LEAST
exactly equal to the amount due for interest at the
end of the first period, which I may safely do,
inasmuch as I know that banks, as with all firms, are
disbursing MORE than their sales, in a normally
expanding economy, as a statistical matter, yet are
booking a profit.

JCT: This is what the old Socreds wanted to do when interest
made the debt grow more than the money in circulation. Since
they didn't know the Ryan Rule of Bank spendings and didn't
know there was enough to make it all work, they thought
they're fix the problems they observed by balancing the
shortage caused the interest in exactly the same way Ryan
says the banks do it. Does that mean that since it hasn't
worked for the banks, it wouldn't have worked for Social
Credit too? Har har har.

M: So banks in actuality are spending more into circulation
than they are taking back for interest and other fees being
paid to them, which is what enables interest and other fees
to be paid to them.

JCT: If they can spend from the tap, why would they spend
from the reservoir at all? If you could print it up to
spend, why would use you use your already existing money?
He's telling us that they spend all their earnings in the
reservoir and then they take money out from the tap. Har har
har.
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Tue Aug 14, 2007 2:04 pm ((PDT))

--- Myro Ashenopolitus <new_economics@...> wrote:
> Your understanding is incorrect. Who told you that?

TC: Please provide me with a URL to any reasonable authority
on banking that shows that a bank can use its money creation
capability to pay its bills.

JCT: Bet he hadn't responded. Ryan can never produce.

> M: That is not at all what the graph shows, but all
> payments by firms for salaries, wages, dividends and
> ordinary business expenses. The expensing of these
> disbursements is delayed through time through the rules of
> double entry accounting, so they are charged against
> future sales, which are prospectively greater than current
> disbursements

TC: That may be so, but it is completely irrelevant to the
issue under discussion, because in no way whatsoever do they
add to the existing stock of dollars in circulation.

JCT: If they did come from the new money tap, there would be
inflation or unemployment. But since they really come from
the old money reservoir, as Myro Ryan admits: "Of course the
principal is insufficient" to repay the principal and the
interest without the banks raiding the tap.

>> "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."
> ---
> Modern money is not a medium of exchange but a
> generalized contract for future performance,

TC: Nonsense. If it isn't a medium of exchange what are we
using as a medium of exchange?

JCT: He says such silly things.

> utilizing the ticket metaphor, where the ticket is
> redeemed ultimately for goods and services.

Nonsense. Sure, each buyer redeems the tickets in his
possession with every transaction as the ticket passes on to
the seller. But the *final* act of redeeming (and retirement
from circulation) is the only one that is relevant to this
discussion and that happens only when a borrower pays down
the principal of a bank loan. There is absolutely no other
way for the ticket to be redeemed and withdrawn from
circulation.

JCT: Good point. Myro/Ryan keeps saying that that tap money
comes into circulation through bank spending but never
thought about how it should be withdrawn. It would have to
go down the "principal" hole.

> Banking facilitates entrepreneurial spending in advance of
> prospectively increasing sales,

TC: Using a mechanism that is fabulously expensive to the
marketplace for precisely the reasons John Turmel and Marc
Gauvin have explained.

> where profit is calculated according to the rules of
> double entry accounting.

TC: Irrelevant.

> The great flux of "tickets" given to final consumers in
> salaries, wages and dividends throughout the structure of
> production, reflux through sales over the retail counter.

TC: This sentence is worse than irrelevant, it says nothing
at all.

JCT: I'm not alone in noticing.
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Tue Aug 14, 2007 7:20 pm ((PDT))

"Please provide me with a URL to any reasonable
authority on banking that shows that a bank can use
its money creation capability to pay its bills."
---
M: Since as it was YOU who used the word, "illegal," I would
think it is incumbent on YOU to supply an actual citation to
some statute book from some jurisdiction somewhere where
that practice is declared to be illegal. Or shut up.

JCT: Har har har. Myro claims Martians create our new money
and when challenged to prove it, he says that our failure to
prove that Martians don't create it is proof that it must be
created by Myro's Martians. The Pink Elephant syndrome.

M: Banks simply have the ability to credit their own
customers' deposit accounts, which are among their
liabilities, or write checks to anyone for any purpose
whatsoever, the only requirement being to redeem them in
legal tender on demand.

JCT: Now he's saying they borrow their spendings like
everyone. Before, they spent new money into existence debt-
free so it could be used to pay off the extra debt and now
it's spending new money into existence which they must later
pay back. Caught in a contradiction.

"If it isn't a medium of exchange what are we using as
a medium of exchange?"
---
Modern money does not function as a medium of exchange, so
the answer is that we are not using anything as a medium of
exchange.

JCT: Luckily, I'm not discussing whether money isn't a
medium of exchange.
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Wed Aug 15, 2007 7:00 am ((PDT))

> "Please provide me with a URL
> -------------------------------------------
> Since as it was YOU who used the word, "illegal," I would
> think it is incumbent on YOU to supply an actual citation
> to some statute book from some jurisdiction somewhere
> where that practice is declared to be illegal. Or shut up.

TC: The original claim that banks spend money into
circulation was yours. I stated that I thought it was
illegal. I claimed nothing, I merely asked, politely I might
add, that you substantiate your claim.

JCT: And when he can't put up, and won't shut up, he tries
to turn the onus onto the winner of the debate.

> Modern money does not function as a medium of
> exchange, so the answer is that we are not using
> anything as a medium of exchange.

TC: In which case you are arguing that no exchange is taking
place, not a position I'd care to defend. Once again I'd
suggest you forget your theories and equations and think
about how things actually work.
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Wed Aug 15, 2007 9:54 am ((PDT))

"TC: Meanwhile, the issue under discussion is the
redistributive effect from poor to rich of a particular type
of money created through interest bearing debt. Since
Douglas was strongly opposed to money created by that means,
and argued for other kinds, it is absurd to use his
arguments in an attempt to support what he opposed."
---
M: Since you are presenting yourself as being an expert on
what Douglas was opposed to, please point to where Douglas
even once expressed that he opposed bank loans or the
collection of interest on bank loans. The fact is that he
was contemptuous of what he called "usury hunters." Myro

JCT: Sure, he was going to issue new debt-free money so
people could pay off their debts for which "Of course the
principal is insufficient." It didn't mean he approved of
taking from the poor to give to the rich, he just didn't
think we could do anything about the imbalance short of
compensating for it. We know we can turn the usury imbalance
to zero so I hope this is just another Ryan allegation he
can't back up about Major Douglas who thought compound
interest quite "not natural." And can find that. See my
books reports on Douglas at my site.

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Thu Aug 16, 2007 7:16 am ((PDT))

>> TC: I suggest you try his wristwatch 'reality play' next
>> time you go to a party, and you and everyone present
>> will experience the reality of it."
> M: Not the reality of it. It has no relevance to how
> loans and interest work in the real world.

TC: Clearly, you have never tried it.

JCT: Clearly.
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Thu Aug 16, 2007 12:34 pm ((PDT))

Thanks for the reply. I'll read your "wristwatch scenario"
later, when I have more time. I'll briefly respond to some
of your other comments.

JCT: Of course he's visited the bankmath page. He made me
change part of it. I'd said that positive feedback was
undesirable and he pointed it out it was often desirable in
electronics. So I changed it to say that positive feedback
was unwanted in banking in case anyone else like him forgot
the topic under discussion happened to be banking. Har har
har. His one great victory.

M: New borrowing is not required to repay old borrowing,
inasmuch as the banks are spending money into
circulation in payment for the goods and services they
are receiving in reciprocal trade. What they are
spending into circulation, in a normally expanding
economy, is more than enough money for the more
general community to pay interest and others fees back
to the banks.

JCT: Constant repetition may make it so. But it does focus
on the real issue. Are bank expenses from the reservoir or
the tap?
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Thu Aug 16, 2007 2:52 pm ((PDT))

> New borrowing is not required to repay old borrowing,
> inasmuch as the banks are spending money into
> circulation in payment for the goods and services they
> are receiving in reciprocal trade.

TC: Can you provide me with links to some reading material
that corroborates that? It clashes with everything I've
understood, so while I'm extremely skeptical, I'd like a
complete layman's explanation, if you have one, to see what
it is I'm missing.

JCT: He hasn't been able to back up anything so far.
---

>Posted by: "new_economics" new_economics@...
>Date: Fri Aug 17, 2007 6:29 am ((PDT))

"Can you provide me with links to some reading
material that corroborates that? It [meaning the idea
that banks spend money into circulation] clashes
with everything I've understood, so while I'm
extremely skeptical, I'd like a complete layman's
explanation, if you have one, to see what it is I'm
missing?
---
It is not really a difficult concept to understand.

JCT: Whether it's true or not is the issue, not whether it's
easy to understand. Yes it's easy to understand that you say
that bank expenses come from the tap. And easy to understand
that you can't back it up in a field of Economics Textbooks
that say only loans that have to be paid back come from the
tap.

The idea goes back to transcripts from the Scottish
Accounting debating societies of the late nineteenth
century, which we found in our research. They are
published and available in better research libraries.
It is the concept of flux and reflux, where the flux is
spending by firms, and the reflux represents sales.
In an expanding economy the flux is always greater
than its simultaneous reflux, which may be drawn
as leading and lagging curves. The flux is expensed
by delaying its curve such that it is matched against
future sales, which are prospectively greater than
today's disbursements, yielding an accounting
profit. So you have three curves in the standard
accounting model from the late nineteenth century.
See the drawing at
http://www.geocities.com/new_economics/accounting_profit.gif

JCT: Maybe Scottish gobbledygook will convince us that the
bank expenses come from the tap and not the reservoir.
---

>Posted by: "Myro Ashenopolitus" new_economics@...
>Date: Fri Aug 17, 2007 11:00 am ((PDT))

M: The fact is that banks, in a normally expanding economy,
are always spending MORE THAN ENOUGH money into circulation,
for salaries, wages, dividends and other business expenses,
to enable the general economy to pay interest plus other
fees back to the banks. Myro

JCT: The Social Credit solution of government issuing debt-
free money to balance the debt for interest beyond principal
has been in effect by banks issuing debt-free money to
balance it? Har har har. It's the only argument he has so
"Of course the principal is insufficient."
---

>Posted by: "dlwild" dlwild@... leonardo_wild
>Date: Fri Aug 24, 2007 10:12 pm ((PDT))

LW: On this thread of discussion ... whether banks make
money or not, sometimes I wonder if people do research at
all before they actually present opinions as facts. Go to
www.snb.ch, the official Swiss National Bank's website, and
look up: Home / Information about / Publications /
Publications about the SNB choose "The world of the national
bank," then look up on the subject BANKS (not money), and
there you will find the following text under the heading
"HOW BANKS INCREASE THE SUPPLY OF MONEY" as posted by a
bank... for all to view. You will find the following text:

> How banks increase the supply of money

JCT: But just because they don't say that bank spend new
money into circulation from the tap doesn't prove that
Ryan's wrong when he says they do. Only his failure to find
one citation that they do proves his wrong far more.

> Banks collect money from savers and lend it to borrowers.

JCT: Step 1 in Orwell's Doublethink, the ability to accept
two contradictory points of view as both true at the same
time, that loans from from the old money savings reservoir.

> Through this intermediary role the banks create new money.

JCT: Step 2: Banks lend out newly-created money so that
loans are old savings from the reservoir at the same time as
new money from the tap. Can't be both. The Great doublethink
of Economics.

> Banks are therefore "money creators"....
> The money supply has therefore increased...

JCT: That's how loans equal new money from the tap. Ryan's
claiming bank expenses are new money from the tap too.
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Thu Aug 30, 2007 6:23 am ((PDT))

In short Myro, you have not succeeded in convincing me of
anything so far, and the validity of Turmel's model still
stands. Regards, Hasan

JCT: Right, he hasn't backed up what he's kept saying once.
---

>by: "Myro Ashenopolitus" new_economics@...
>Date: Thu Aug 30, 2007 7:42 am ((PDT))

"...the validity of Turmel's model still stands."
---
M: Please state "Turmel's model" in your own words so we
might discuss it from your perspective. Myro
---

>Posted by: "Dont Panic" trudy_cool@... trudy_cool
>Date: Thu Aug 30, 2007 1:31 pm ((PDT))

That the creation of money by bank lending sets up a rat-
race dynamic in which there is always more money owing than
there is money available to cancel the debt.

JCT: Ryan said "bank spendings" solve the problem. What
problem? Myro accepted the problem being solved by bank
spendings was "the principal is insufficient." Has her
already forgotten what is being discussed or just being
stubbornly obtuse?
---

>by: "John C. Turmel" bc726@... johnturmel
>Date: Sat Sep 1, 2007 3:58 am ((PDT))

> M: Please state "Turmel's model" in your own words so we
> might discuss it from your perspective. Myro

Jct: After all these years and you don't know Turmel's
model is an interest-free casino bank? I don't think you
could have proven your ineptitude more conclusively than not
knowing the Great Canadian Gambler was talking about poker
chips.

JCT: So finally, Daniel, you came over to ijccr looking for
an answer after discussions in another group. Have you found
it? The fact there has been no bet indicates you have.

You got your first 10 units of money for your loan out of
the ATM. When you paid back the first 5, and had 5 left,
there was no way to get the ATM to spend any of those
dollars like your friendly neighbor might. It's the fact
that your loan payment is destroyed, goes down the drain,
that makes it impossible for you to pay your interest
without recourse to off-island money.

I'm glad you didn't bet. I'm glad you found out why paying
off the interest isn't as easy as you originally thought.
Now, go back to that group and tell them what you learned
about the difference between lending and banking.

Unless you haven't learned in which case, say bet and we'll
arrange a forum of debate.


--
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