>Article #26697 (26818 is last):
>From: hsaphc@vms.cis.pitt.edu
>     How precisely does the Bureau of engraving and the Treasury get
>new currency into circulation?  Above and beyond the Fed's conduct of
>monetary policy, how does the Treasury ensure that enough new
>Washingtons and Lincolns are around but not so many that they are in
>essence printing money to pay the bills?  Finally, has the Treasury
>itself -- not the Fed -- ever actually printed money to pay the
>freight since WWII?
>Pooge, University of Pittsburgh

Two notes used in America can clearly show the way,
Both legal tender now down south. They can be spent today:
"United States Note" issued by the nation's Treasury,
And "Federal Reserve Note" which is banker's currency.
Their fronts are very similar except the name they state,
Their backs are very different, it means another plate.
The Treasury provided notes for federal expense,
And taxed them back to balance books with numbers that made sense.

In 1913, other plates were given to the banks,
Creation of the money. They gave politicians thanks.
The Government had given banks permission to create,
A batch of brand new money to be lent at interest rate.
The Government then borrowed from them and at their request,
The Congress passed the Income Tax to pay them interest.
One Congressman objected, Louis T. McFadden, loud,
"The greatest crime in history," he said with head unbowed.

Ten dollars out, eleven back, it often takes a while,
But after years, the end result's a melancholy style.
The money from the Treasury, its use did almost cease,
To pay the interest to banks, the taxes did increase.
And when we ask "The Treasury, why is it never used?"
In answer, we get silence and an attitude bemused.

So to this day the bulk of the American supply,
Is borrowed from the banks at rates that make debts multiply.
All Governments do service debt by taxing you and me,
Instead of letting Treasury create it interest free.
I see no reason for a tax to pay them interest,
When use of plates by Treasury would lower taxes best.

The money from the Treasury was used down south before.
The "Greenbacks" used by Lincoln paid to win the Civil War.
The "Continentals" did their job until King George did state:
"There'll be no use of your own plates, for gold you'll have to wait."
Though we've been told that their revolt was over tax for tea,
Ben Franklin said "The war's because they took our currency."

The Kings and Popes of middle ages were the ones to say,
That interest was evil but since then they've lost their way.
Some presidents who of this Populist idea knew,
John Adams, Thomas Jefferson, and Andrew Jackson too.
Some brilliant scientific men were also of accord,
With Franklin. There was Thomas Edison and Henry Ford.
 

     From article #26835 in sci.econ,
From: ndallen@io.org (Nigel D. Allen)
Subject: Alaskan Money (from American Numismatic Association)
     I found the following article in rec.collecting.coins.
It was posted by ana@athena.csdco.COM (American Numismatic
Association), a group of coin collectors based in Colorado Springs.
Transcript No. 532 October 18, 1994

                            ALASKAN MONEY
by Ken Bressett
      They called it "Seward's Folly," and it happened 127 years ago
today. But as we all know---William Seward had the last laugh.
      This is "A-N-A's Money Talks," and today, we'll look back at the
purchase of Alaska from Russia.
      People called Alaska an ice box, and ridiculed Secretary of
State Seward for buying the rugged and forbidding land from Russia.
No one knew then of the wealth to be found in Alaska's gold and
minerals, nor of the promise of fertile land and opportunity.
      Alaska never had a local money of its own.  In most cases, trade
was carried on using coins from other countries---or, the natives
bartered their furs for blankets, beads and buttons.
      Before Alaska became a state, private tokens, known as bingles,
were used throughout the territory.  Coins were always in short
supply---and with the growth of local businesses, the need for coins
became critical.  Merchants solved the problem by making their own
money in the form of tokens that could be used in trade.  It was good
for business, because customers were forced to return to their stores
to use the tokens.
      In 1935 the U.S. government also made its own form of token
money to help supply families who'd recently been re-settled into a
fertile valley just north of Anchorage.  Farmers from the Depression-
stricken Midwest who moved to Alaska were given the government tokens
as assistance money.  They were similar to today's Food Stamps, but
could be used for all kinds of purchases.
      Private tokens were used throughout Alaska for many years, until
one day when someone tried to buy stamps with them at a Post Office in
Seattle.  He was shocked to learn his Alaskan bingles were not
acceptable as money---and were "legal tender" only in the Territory of
Alaska.
      Alaska's tokens soon became only a memory.  Even before Alaska
became the 49th state, regular U.S. coins were in use by everyone.

     This has been "Money Talks."  Today's program was written by Ken
Bressett and underwritten by Heritage Rare Coin Galleries, the world's
largest rare coin firm.  This is a production of the American
Numismatic Association, America's coin club for over a century.
"Money Talks" is a copyrighted production of the American Numismatic
Association, 818 N. Cascade Ave., Colorado Springs, CO 80903,
(719)632-2646, ana@athena.csdco.com. forwarded by:
Nigel Allen     ndallen@io.org

     As it says, local money issued by businesses was good for trade
because customers were forced to return to their stores.
     Greendollars from the LETS bank by businesses could do the same
thing as Alaskan tokens.
     Just another example of how local currency helps create local
business and local jobs.

John C. Turmel, B. Eng.
Regional Chair candidate

>From: srrd@inforamp.net
>johnturmel@yahoo.com (John Turmel) wrote:
>
>>Of course, all economics is wrong. Without an
>>understanding of the  effects of usury, interest on
>>money rather than cows, they fail to see that there is
>>no way to come up with 11 units of money when they were
>>only loaned 10.
>>But they keep trying to find a way to do the
>>impossible.
>
>Huh?

     Let's see if I can make it easier for you to understand. You're
alone on an island and a banker lends you $100. At the end of the
year, you owe him $110 with interest. Where do you get the extra $10
to pay the interest?
     If you still go "huh?" and you think you know a way of coming up
with something that isn't there, there's nothing more I can do to help
you.
     The impossibility of the demand is hidden from the common view by
the fact that if someone else is on the island and he also borrows
$100, all you have to do is gain $10 out of him to make you think that
the interest is not an impossible demand. But one of you must fail and
the banker will foreclose on one of you. That's why the name of the
interest contract is "mort-gage" from the French words "mort" meaning
"death" and "gage" meaning "gamble."
     If you wonder what's killing all the jobs in the economy, just
check out the contract that starts with "mort."
John C. Turmel, B. Eng. (electrical)

>From: srrd@inforamp.net
>johnturmel@yahoo.com (John Turmel) wrote:
>
>>Milton Friedman once stated that true money should come
>>out of gold mines.
>>That's why when you pass their faculty, you can hear
>>them chanting  and praying for a golden asteroid to hit
>>the earth.  With enough yellow rock, they think there
>>would be enough money.  Actually, the very best tokens
>>have no intrinsic value.
>
>Such as ... oh .... cash, perhaps?

     Sure, cash would work fine except or one thing. Just as Poker
Chips are an intrinsically valueless but perfect monetary token
medium, so would cash be. But for interest.
     Every time some buys $100 worth of money chips at the bank
cashier (called borrowing) after pledging $100 worth of collateral,
he has to return those chips and the interest. The interest was never
put into circulation which creates an automatic imbalance between the
money in circulation and the debt. That institutional shortage of
money is caused poverty and it causes both unemployment and inflation.
     No-interest Poker chips do not suffer inflation and there are
always enough tokens for everyone to get into the game.
John C. Turmel, B. Eng. (electrical)

>From: hpang@sallie.wellesley.edu
>Finnegan wrote: Did the U.S. government ever seek to inflate its way
>out of debt by increasing money supply as a deliberate policy (with
>currency or otherwise)?
>Which sparked a question: would that actually work?  I'm just curious
>in hearing other's opinions on this because someone I know believes
>that would eliminate the national debt.

     Certainly it would work unless interest is attached to the new
money.
     Think of Poker chips for a minute. If the United States
Government were to pledge its bonds or resources to Ceasar's Palace
for chips and were to pay off the national debt with those chips,
everyone would know they were valuable because they were backed up
with collateral and could be used to pay taxes.
     All that would really be happening is that the interest-bearing
debt would be converted into non-interest-bearing debt and all debt
payments would go against the principal.
     I'd bet it wouldn't be too long for the U.S. to clear its
national debt and be in surplus.
     Poker chips are a perfect monetary token medium which do not
inflate and are sufficient to let everyone get into the economic game.
John C. Turmel, B. Eng. (electrical)

>From: Markku Stenborg <marsten@utu.fi>
>In article <Cy5uMC.IKu@freenet.carleton.ca> John Turmel,
>johnturmel@yahoo.com writes:
>
>>     The problem of debt is created within the banking system and
>>therefore a thorough understanding of the banking system is helpful.
>
>[loads of undergrad. econ. & mindless rambling deleted]
>What the *%## is this? I thought all the ignorant morons were on RE:
>Deficit Is Up... or on rec.sport.football.college. Get a life, pal.
>Markku

     So why aren't you with your peers? Is this another in-depth
criticism from the economics pseudo-profession. I'm not only a systems
engineer but I was the teaching assistant of Canada's only Mathematics
of Gambling course. I'm also a professional gambler and am always
ready to back up what I say.
     That's why I always love to tell loud-mouths who resort to name
calling to put your money where your mouth is. If you can't put up,
shut up.
     I've always found that most "shoot-from-the-mouth" experts always
chicken out saying you don't gamble. I've always found that gambling
sharpens the brain. That's why I'm so sharp and you're so dull.
     So try to say something coherent, if you can, or quit using up
space that could be better allocated to people who can.
John "The Gambler" Turmel

>From: whitaker@usna.navy.mil (PROF A. R. Whitaker (FEC FAC))
>     I wouldn't dream of trying to improve on John Turmel's delightful
>versification (is it original?) but can provide a few clarifations.
>First, control over the money supply is, under the constitution, in the
>hands of Congress. Congress did authorize the printing of U. S. Notes,
>non-interest-bearing to serve as hand-to-hand currency, during the Civil
>War. This led to the legal tender cases, which need not detain us. Most
>of that original issue is still in circulation, most readily identifiable
>by the red seal (Federal Reserve Notes carry green seals). In the early
>1930s Congress authorized a ten-fold increase in the issue of U. S. Notes
>because they believed (correctly, I think) that the catastrophic collapse
>of the money supply was the main cause of the depression. This money could
>have been put into circulation by cash payment of federal payrolls and
>other obligations all over the country. The administration chose a more
>roundabout approach.
>  < Explanation of the roundabout approach.>

     Why settle for a roundabout approach when issuance into
circulation by payment of federal payrolls has always worked perfectly
in the past?
     The British used the interest-free Tally system in exactly the
same way. The Treasury carved a stick of wood to represent 10 pounds
of gold, split the stick in two, one half being the tally money and
the other half being the stub kept in the Treasury for counterfeit
prevention purposes. At the end of the year, they counted up how many
stubs the find out how many tallies the King had spent to upkeep the
kingdom and that was the tax. Taxes always equalled the tallies in
circulation to pay them.
     That's the whole problem with the present currency system.
Government borrows the principal and pays for expenses. Then it has to
tax back both the principal and the interest. No money was issued into
circulation to pay the interest.
     This creates a pre-determined amount of failure. That's why the
interest-bearing contract is called "mort-gage" from the French words
"mort" meaning "death" and "gage" meaning "gamble." It's just like
musical chairs where everyone knows that when the music ends, there
aren't enough chairs for everyone to survive. Similarly, there isn't
enough money issued into circulation to repay both the principal and
the interest when only the principal was issued.
     Perhaps there was a hidden agenda which prevented the U.S. from
using a system which Lincoln used so well before.

>     One purpose of this roundabout technique of auctions and open
>resale markets is to enable the Fed to say No to Congress and the
>President.
>Of course Congress created the Fed and Congress can destroy it
>or limit it, but at least there's a layer of restraint.

     Why would you allow an unelected group of individuals to say no
to the projects of the your own government to the benefit of private
banking corporations? Is this not the anti-thesis of democracy?

> Government then borrowing the rest from the private sector.

     Again, why would a government get in debt to the private sector?
The Kings of England who knew where the true source of the regal power
lay never had to. No sovereign government should ever give away the
power over the creation of its money supply to private interest who
can say No to nationally desirable projects.

>so that some inflation is to be expected.

     Inflation can never be expected in an interest-free Poker Chips
system where every token issued is backed up one-to-one with
collateral. Inflation is impossible or they'd beat up the casino
banker.

John C. Turmel, B. Eng.

     In article #27091 ma_friesel@pnl.gov (mark a friesel) says:
>(John Turmel) wrote:

>>                            BIBLE ECONOMICS
>>                       by John C. Turmel, B. Eng.
>>                              (558 verses)

>     A difference between scientific and literary personalities: the
>scientific personality will quickly realize that the information
>content of the following could be expressed without loss in a short
>paragraph, and quit reading.
     A scientific personality who quit's reading new correct
information because of style isn't a very good scientist.

>     Those with a literary bend will find themselves reading 558
>verses of amusing but bad poetry, and probably ignore the information
>content.
     I hope those with literary bent who ignore the information in
verse to concentrate only on style are few and far in between. What do
they do? Look only at the last words of each line to see if they
rhyme?
     I originally wrote all of the information in prose. But there is
an advantage to putting it to verse. You have to infer the right
information and often restructure the sentences to get the right
meaning which will jive with the rest of the verses.
     I've always had a choice of offering it in prose or in verse and
I've found that most people react most positively when they read it in
verse.
     As to the poetry being bad, you're the first critic who has ever
judged it so. Besides, all those who have responded to date, have
indicated no such criticisms. Perhaps, you could you could post some
good verses so that we might compare and find out what makes poetry
good in your eyes.
John C. Turmel, B. Eng.

     In article #27104 "M A. Chaves-chamorro"
<macg1971@uxa.cso.uiuc.edu> says:
>On Sun, 30 Oct 1994, PROF A. R. Whitaker wrote:
>>
>>      Yes, a country can pay off its national debt by printing the
>>  currency, but it's not a good idea because it's likely to turn on an
>>  inflation. At one point during the Viet Nam war the Fed was monetizing
>>  100 percent of new federal debt, and at present it is funding about 8
>>  or 9 percent of new debt. *Some* growth in the money supply is approp-
>>  riate when real output is growing, and monetization of the federal debt
>>  is currently the only way to accomplish that.
>
>     I guess the only effect of paying off the national debt by
>printing fresh green backs is not only inflation, but also
>devaluation of the US-dollar with respect to harder currencies like
>the yen and the D-mark, and even the Swiss franc and the Dutch
>Gulden.

     Why is there always the assumption that printing up new
Greenbacks will result in inflation. If you're sitting at a Poker game
and a new player comes into the game with new chips, do you jump to
the conclusion that your chips are not going to inflate? You do not
because you know the casino banking system never issues tokens unless
they are backed up one-to-one with collateral.
     Because inflation is actually a decrease in the collateral
backing up money rather than an increase in the money being backed up
by the collateral, adding liquidity to a nation's money supply
actually brings inflation down. Consider the following article:

Thursday November 28, 1985,
The Charlotte Observer,
CASH-STARVED ARGENTINE PROVINCES TURNING OUT THEIR OWN MONEY
By Andres Oppenheimer, Knight-Ridder News.
     MIAMI -- Two remote Argentine provinces, short of cash to pay
public employees, have come up with an easy solution.
     They're printing up their own money, to the chagrin of the
national and international banking authorities.
     "We are paying all our public employees with provincial bonds,"
Roberto Romero, governor of the northern Argentina province of Salta,
said in a telephone interview. He said Salta started printing its own
IOUs because it wasn't getting sufficient federal currency fast
enough.
     "People can change these bonds for money at any bank," Romero
said. "They can use them to shop at supermarkets and to buy cars or
any other products."
     The Argentine government is not smiling, and world bankers are
worried that other cash-starved states will copy Salta's financial
extravaganza and jeopardize Latin efforts to curb inflation and pay
huge foreign debts.
     The International Monetary Fund (IMF), the world's main financial
inspector for debt-ridden countries, was concerned enough to bring up
the issue in recent talks with the Argentine government, said sources
in Argentina and Washington. The IMF does not comment on negotiations
with individual countries.
     After Salta started quietly issuing its own IOUs in September
last year, the nearby province of La Rioja started printing its own
bonds too. Four other Argentine provinces have either begun adopting
similar programs or are preparing to do so.
     In all cases, the bonds are good only within the province where
they're issued.
     But the government of President Raul Alfonsin says the provincial
bonds are expanding the country's money supply and are undermining
efforts to remove Argentina from the list of world inflation leaders.
Earlier this year, Argentina had a 1,000% annual inflation rate.
     Alfonsin made headlines worldwide in June when he launched an
austerity program built around a commitment to stop his government
from printing money. Since then, inflation has dropped to 3% a month,
a record low in recent history.
     The bonds printed in Salta come in denominations of 10, 100, and
1,000 australes, the same as ordinary Argentine currency bills. They
pay no interest and can be either exchanged for Argentine currency or
used to buy goods.
     Romero, of the opposition Peronist Party, and officials of other
provinces claim their bonds are not really new currencies because they
are no good outside their provinces.

     Notice that though the world bankers are worried that Salta's
financial extravaganza will jeopardize Latin efforts to curb
inflation, I hope you noticed that earlier that year, Argentina had a
1,000% annual inflation rate but since then, inflation has dropped to
3% a month, a record low in recent history.
     I posted the math explaining why increasing the money supply
should actually reverse inflation as shown because inflation is
actually due to a lack of money to pay expanded debt and more money to
pay that expanded debt means there will be less foreclosure of
collateral backup up the chips.

>     I posed some weeks ago the question "What is money?". As long as
>this question is not really answered, the working of capitalism will
>remain a puzzle. In this sense both mercantilists and Keynes are not
>so wrong at all.
     Money is a casino chip which unfortunately is not loaned out on a
one-to-one collateral base as casino chips properly are.
     If the US pledged its resources behind a new kind of money casino
chip on a one-to-one basis, their money couldn't inflate and all
future payments would go towards principal.

John C. Turmel, B. Eng.

     In article #27178 whitaker@usna.navy.mil (PROF A. R. Whitaker
(FEC FAC)) says:
>The point is that no matter how it's done, a 3 percent growth rate
>will not be inflationary - contrary to popular wisdom, the federal
>debt is not *inherently* inflationary.

     The whole problem with such a discussion of inflation is that the
proper relationship between collateral and money chips is not taken
into account.

     At a casino bank, there is never any discussion of issuance of
chips until the collateral is pledged.
     In the current money system, the relationship is backward. Money
is issued in the hopes that the collateral will eventually be created
to back it up but with no structural relationship to that collateral.
     If the relationship were frontward as in a casino bank, money
chips would be issued as as a function of work done and not work done
as a function of money chips issued.

John C. Turmel, B. Eng.

     In article #27202, gsmcinto@uxa.ecn.bgu.edu (Steven E. McIntosh)
says:

>     Interest doesn't cause inflation, inflation causes interest.
     Absolutely backwards and easily proved if you'd read my
submission on article 26820. Read it first and see if you change your
mind. If it doesn't convince you, then I'll explain.

>     If there were zero inflation, there would still be something
>called the real rate of interest that comes from economic growth.
     No there would not.

>     If at zero inflation, there was economic growth at 4%, there
>would be an equivalent real rate of interest, because that's what
>economic growth is - the real rate of interest.
     Doesn't happen in the real world.

>     There is also something called the time value of money, which
>says that a dollar today is worth less than a dollar tomorrow, even
>without inflation.  Wouldn't you value a dollar you received today
>more than a dollar you were promised to be given a year from now?
     No. The time value of money is a scientific fantasy that makes no
sense at all if you are working with a properly functioning money
sytem.

>     These two influences, the time value of money and the real rate
>of interest, combine to set a nominal interest rate, even with zero
>inflation.  This is the formula for figuring it out:
     A formula that uses two erroneous factors can't really work.

>    In other words, even without inflation, the value of $1 today is
worth only 67 cents 10 years from now because of economic growth.
     Gotcha! Not in a properly functioning money system. Check out my
previous post to understand why.

>     Or does the Bible prohibit economic growth, too?
     No, the Bible doesn't prohibit economic growth. It prohibits the
demand for the growth of money which doesn't happen to grow. Only
debts for live things that have babies can sustain a demand for
growth. Your herd of cows can grow but your bag of gold is sterile.

John "The Engineer" Turmel, B. Eng.

     In article #27204, bgoffe@whale.st.usm.edu (William L. Goffe)
says:
>John Turmel (johnturmel@yahoo.com) wrote:
>:      Any loan rate on money is usury. My grandfather, Adelard Turmel,
>: explained it this way. "Interest on money is usury because money has
>: no babies."
>:      If I lend you 100 head of cattle and you have a bull, asking for
>: 110 head back next year might be considered reasonable interest. If I
>: ask you to return 210 head, that might be considered excessive
>: interest unless they have a lot of twins.
>:      But if I lend you 100 pieces of gold and you don't have a gold
>: mine or 100 pieces of money and you don't have official money plates,
>: and since gold and money have no babies, that's usury which creates a
>: "mort-gage" "death-gamble."
>
>     And if I use the 100 pieces of gold to buy 100 head of cattle,
>and you ask for 105 pieces of gold back next year when I've got 110
>cattle?

     This is a standard economic fantasy. If banks accepted head of
cattle in the payment of interest, there would be no problems. But
they don't and no amount of wishful thinking will change that.

     Don't you see the predicament you are in?

     It's the same predicament every farmer is in and every economist
can't see. You were loaned 100 pieces of gold and the bank doesn't
care what you bought with it. The bank is not going to take your 110
head of cattle when it can buy your farm for a song after they've
foreclosed if you don't give them the 105 pieces of gold you
contracted for.

     The mort-gage contract calls for 105 pieces of gold and no matter
how many head of cattle you produce, you can never pay the extra five
pieces of gold.

     Thinking more productivity solves the debt crisis is standard
wishful economic fantasy.

John "The Engineer" Turmel, B. Eng.

     I received a message from degroff@netcom.com (21012d) Les DeGroff
asking two questions:
>   How does "no interest" chip/tokens handle time and credit
>situations....
>    Say I am 20 yrs old and need 1000 units for machinery and raw
>materials for a business...lets say 500 tools and 500 for
>materials.... Lets say in fact that I intend to make tools of the
>same kind as I use and that in a year I can make 2000 tools with the
>500 materials and (unconsumed) 500 tools...as an added complexity, I
>need 365 units to pay for food, shelter etc.
>    So if someone gives or lends me 1365 units, I can produce 2000
>units of wealth (and I still have 500 units worth of productive
>tools)? What kind of loan system can be supported with this kind of
>balance sheet?
     Fair example. For a truly realistic example:
     1) Let's assume only one production cycle after which you wish to
retire. It applies over as many cycles as you would want.
     2) Let's assume that I will charge you 35 chips as a service
charge for my banking services.
     2) Let's also assume that your tools depreciate 20% for a loss in
value of 100 chips.
     3) Let's assume that everyone in the village is using casino
chips as currency based on pledged collateral and I'll run it as I
presently run my casino bank.

     Pursuant to your loan application, I lend you 1,365 chips in
exchange for your marker (IOU).
     You buy machinery with 500 chips, materials for 500 chips, food
and support for 365 chips.
     During the year, you produce 2,000 worth of values.

     You bring the 2,000 worth of collateral and exchange it at the
casino cage for 2,000 chips.
     Now you settle up.
     You return the tools and 100 chips for the depreciation.
     You return 500 for the materials consumed.
     You return 365 chips for the food and services consumed.
     You pay 35 chips to the casino cashier's service charge.

     Having paid back 365+500+100+35=1,000, you are left with 1,000
chips which represents the profit and extra value from your enterprise
upon which to retire.
     That's how capitalism should work.

>    Second question:  Is there any criteria beyond productivity
>for "reasonable return."
     Whatever return you score is the return you get.
     But assume for some reason that the free market chooses to value
your production at only 800 worth of values. In that case, you can't
fully settle your marker. But with no interest, you have the
opportunity to try again in the same or any other enterprise which you
might be more successful at.
     There's no reason to foreclose on and punish losers. Everyone
should be able to keep trying to find something the free market will
find profitable. With guidance, most people would find a niche in the
industrial system.
     Now consider the situation where 10 robots all borrow 1,000 chips
and they all have to come up with 1,100 chips. One of the robots has
to fail to sell and be foreclosed on proving that interest creates
losers independent of "bad management."
     Using a casino chip banking system always makes understanding
interest-free banking easy to understand. (I hope.)

John "The Engineer" Turmel

     In article #27344, hfinney@shell.portal.com (Hal Finney) says:
>     Mr. Turmel's model is based on a fixed-size money supply.
     No. A casino banking system is based on a totally flexible number
of chips issued from an infinite chip supply.

>     For one thing, in an economy with a fixed-size money supply,
>economic growth leads to a general drop in prices.  Suppose our money
>supply is 12 casino chips and we have 12 potatoes that everyone
>wants.  Plausibly the price will be 1 chip per potato.  Next year we
>plant more and we have 24 potatoes.  The price will drop, perhaps to
>.5 chip per potato.  This phenomenon of a fall in prices is the
>natural consequence of having more goods with the same supply of
>money.
     This would certainly be true if it were a fixed-size chip supply.
But as in any casino, if you bring another 24 potatoes to the bank,
the bank will issue another 24 chips into circulation and the value of
each chip will always remain one potatoe. No casino runs out of chips
and no casino's chips change value.
     Unfortunately, the remainder of the criticism is based upon the
hypothesis that a casino has a finite number of chips which is not the
case I wish to propose.

John C. Turmel, B. Eng.

     In article #27263, gsmcinto@uxa.ecn.bgu.edu (Steven E. McIntosh)
says:

>You can say that if you charged a higher rate of interest, or indeed
>any interest at all, you are increasing the money supply.
     Check out your basic economics text book and you'll find out that
the money supply is increased upon the granting of a loan by a bank.
Money is created at the point of the granting of the loan and
interest has no effect on monetary mass. Charging interest does not
not increase the money supply. It only increases the debt. With debt
growth and no money supply growth, that results in the imbalance which
causes the chronic insufficiency of money to repay the debt.

>If you were to eliminate interest, the quantity of money demanded
>would increase, money supply would have to radically adjust itself to
>compensate for it, and we would have hyper-inflation.
     How can you assume that an increase of the chips in circulation
will cause inflation if you haven't considered if there is collateral
to back it up? It's evident that if collateral is pledged one-to-one
as the monetary mass is increased, it's not inflationary. That's the
whole problem with economic reasoning with respect to the money
supply. You never deal with both factors at the same time.

>: >     If there were zero inflation, there would still be something
>: >called the real rate of interest that comes from economic growth.
>:      No there would not.
>: >     If at zero inflation, there was economic growth at 4%, there
>: >would be an equivalent real rate of interest, because that's what
>: >economic growth is - the real rate of interest.
>:      Doesn't happen in the real world.
>: >     There is also something called the time value of money, which
>: >says that a dollar today is worth less than a dollar tomorrow, even
>: >without inflation.  Wouldn't you value a dollar you received today
>: >more than a dollar you were promised to be given a year from now?
>:      No. The time value of money is a scientific fantasy that makes no
>: sense at all if you are working with a properly functioning money
>: system.
>: >     These two influences, the time value of money and the real rate
>: >of interest, combine to set a nominal interest rate, even with zero
>: >inflation.  This is the formula for figuring it out:
>:      A formula that uses two erroneous factors can't really work.
>: >    In other words, even without inflation, the value of $1 today is
>: worth only 67 cents 10 years from now because of economic growth.
>:      Gotcha! Not in a properly functioning money system. Check out my
>: previous post to understand why.
>: >     Or does the Bible prohibit economic growth, too?
>:      No, the Bible doesn't prohibit economic growth. It prohibits the
>: demand for the growth of money which doesn't happen to grow. Only
>: debts for live things that have babies can sustain a demand for
>: growth. Your herd of cows can grow but your bag of gold is sterile.

>All this sounds like the ramblings of a poor loser who can't accept the
>facts.  Money is a commodity like everything else.
     Absolutely incorrect. Money is a token and tokens, though treated
as commodities by economists, are not commodities. And you're talking
to someone with a real science degree in electrical engineering who's
also a professional gambler. So I'd bet I'm the winner and you're the
loser.

>It is made out of publicly traded commodities, lumber and cotton, it
>has a price (nominal interest), and it is consumed by society.
     Yes but a $1,000 dollar bill has commodity value of lumber and
cotton worth a penny or two at most. Offer me $1,000 worth of paper
and I'll accept your argument that that paper is a commodity. But
don't try to tell me that 2 cents worth of lumber or cotton is a
commodity worth $1,000.

>Money is a commodity that is used to facilitate exchange.  That is
>its purpose.  As such it has a high value in and of itself.
     Sorry. In and of itself, a poker chip has a value of about 50
cents and no gambler would believe that a $1,000 chip had a value of
$1,000 in and of itself. Money is of little value in itself though
economists have managed to delude themselves that it is.
     Besides, if it had value in and of itself, why would it inflate?
A barrel of oil always has the caloric value and can't inflate. The
non-monetary value of all real commodities can't inflate.

>At no charge, lent money would become very scarce at first...
>causing a depression in the short run, and money supply would have to
>increase dramatically to compensate, causing hyper-inflation in the
>long run.
     So money would become scarce and then cause in hyper-inflation.

>A no interest policy is artificial and doesn't reflect the reality
>that money is a commodity with its own price.
     Of course a no-interest policy doesn't reflect that money is a
commodity because it isn't. It simply reflects what the real
commodities are pledged in the game.

>The natural way to deal with the issue is to charge the price for
>money that the market demands, and adjust money supply to fit the
>optimal rate of economic growth.
     Charging a price for chips is a really stupid way to run a game
if you want optimal economic action. It's far better to take a service
charge or rake-off for the action generated in the game.

The rate or amount of inflation does not matter in the big picture.
What matters is the rate or amount of economic growth.  In order to
further the progress of technology, the economy must grow enough for it
to progress.

>High interest rates tend to stifle economic growth, but
>low interest rates nurture it.
     So a lot of failure is bad but a little failure is good?

>However, low interest rates *can* increase inflation and increased
>inflation *can* slow economic growth in the long run.
     Low interest rates can't increase inflation. Inflation is a
direct function of interest rates. Low interest rates generate some
inflation, lower ones generate less and no interest generates none.

>If your goal is to eliminate inflation in the long run, you should be
>all for usury.
     No. You've still got it backwards. It's evident you haven't read
my analysis of casino chips accounting and until you do, all you'll be
able to do is spout standard economic mis-reasonings.

>If your goal is to eliminate inflation in the short run,
     No. My goal is to eliminate inflation in both the short and long
run.

>you should be for stifling economic growth, as Volker did in the
>early 80s, by raising interest rates to usurious levels.
     There's no need to stifle growth to eliminate inflation.
     All interest rates are usurious. There is no cut point. If you
think there is, what is it?

>So, the best way to achieve your goals is to do exactly the opposite
>of what you are doing now.
     That might be the conclusion from someone who has been taught
everything backwards. Remember that I have experience with a perfect
monetary model, a casino chips accounting system, which does not
suffer inflation and we never run out of liquidity. You have no
experience with a perfect model and seem to have absorbed all the
propaganda of the backwards model.

John "The Engineer" Turmel, B. Eng.

     In article #27265, degroff@netcom.com (21012d) says:
>In article <CyxL88.JB5@freenet.carleton.ca> johnturmel@yahoo.com
>(John Turmel) writes:
>>     Fair example. For a truly realistic example:
>>     1) Let's assume only one production cycle after which you wish to
>>retire. It applies over as many cycles as you would want.
>>     2) Let's assume that I will charge you 35 chips as a service
>>charge for my banking services.
>>     2) Let's also assume that your tools depreciate 20% for a loss in
>>value of 100 chips.
>>     3) Let's assume that everyone in the village is using casino
>>chips as currency based on pledged collateral and I'll run it as I
>>presently run my casino bank.
>>
>>     Pursuant to your loan application, I lend you 1,365 chips in
>>exchange for your marker (IOU).
>>     You buy machinery with 500 chips, materials for 500 chips, food
>>and support for 365 chips.
>>     During the year, you produce 2,000 worth of values.
>>
>>     You bring the 2,000 worth of collateral and exchange it at the
>>casino cage for 2,000 chips.
>>     Now you settle up.
>>     You return the tools and 100 chips for the depreciation.
>>     You return 500 for the materials consumed.
>>     You return 365 chips for the food and services consumed.
>>     You pay 35 chips to the casino cashier's service charge.
>>     Having paid back 365+500+100+35=1,000, you are left with 1,000
>>chips which represents the profit and extra value from your enterprise
>>upon which to retire.
>>     That's how capitalism should work.
>
>     Well, the first question from these additions is "What's that 35
>chip service fee.... (having had similar conversations with
>economists and read a summary or two on Islamic concepts)

     The banker receives a service charge because the banker has to be
paid for the service he offers.

>  Now I have a major objection to the results phase however:
>  I KEEP THE TOOLS!!!( and pay that part back)  this
>  is the crucial issue to capitalism, CONTROL of the capital.
>  Even in the simple model we get into the social issues of
>  long term control.  (or if I cannot KEEP them, I purchase
>  my next set)

     When everyone has access to credit, the ability to obtain chips
for one's marker, there is no improper monopoly control of capital.

>  Then the final issue, which is not addressed by our "success"
>  scenario.  If the results are only worth 800, the lender
>  is "forgiving" but is out at least 865 (materials and support)
>  possibly 965 if depreciation is included.

    The lender is not forgiving. The part of the marker he can't pay
remains on the books as he tries again. But we don't break the guy out
of the game and there is always the opportunity to try again, even if
at another enterprise.

>  Is the lender happy about this?  Is he very very careful
>  about who he lends too, ensuring success?  Is he going to
>  raise his fee so as to build up reserves from winners
>  to cover losers?

     The lender is society in general. No. Society would have been
happier with his producing something worth more than the ingredients
put in. But in the case of failure, society hasn't really been hurt.
And the failure need only be taken into account if and when the
enterpriser dies. Then his net negative can be distributed throughout
the database. It's like everyone sharing in a loss by pitching in on a
work-bee to help someone who's suffered a fire.

>   IMHO, from a superficial look, the "punishment", social and legal
>   for "failure" shifts with the levels of risk (in some social sense)
>   historical debt "Slavery", the poor farms and debtor prisons
>   were in a context that the materials and capital were rare
>   and precious. (And often in a context of limited production
>   such that the gains  of labor were fractions rather than n times)

     And what a horrid world where everyone borrowed 10 and everyone
promised to return 11 guaranteeing a loser who was then executed.
Usury slavery was far more deadly in the past than it is now.

>    A very good argument might be made that in a materially wealthy
>   system, with a social rather than personal lender, total forgiveness
>   of losses   (often directly equatable with waste) could be
>   allowed.  From the perspective of Greco/Roman debt slavery, our
>   current bankruptcy laws are getting there.

     Right. But we must eliminate the automatic creation of losers by
a function that demands the repayment of more than was printed.

>   One final issue, there are the decisions about who to lend to and
>how much.

     Of course. If tractors are in short supply, the one most
qualified on tractors and farming should be the one to get that scarce
resource. And that is a function either the banker or society should
do.
     But if tractors or any other assets are not in short supply,
then there's no reason not to let anyone who wants to to get into
farming.
     We are entering a world of abundance and all the teachings
related to a world of scarcity have to be abandoned. That is going to
be hard as long as some people think money is a scarce commodity.

John "The Engineer" Turmel

     In article #27271, ez010081@rocky.ucdavis.edu (Victor Oreste
Stango) fumes:
>John Turmel writes:
>>
>>     Absolutely backwards and easily proved if you'd read my
>>submission on article 26820. Read it first and see if you change your
>>mind. If it doesn't convince you, then I'll explain.
>
>     You are wrong, wrong, wrong.  Just because you have made up your
>own theory without understanding the existing theory doesn't make you
>correct.  I could just as easily claim that gravity will cause obesity
>in lesbians, but that doesn't make it so.

     There is a clear difference between a theory and a working model
with a definite Laplace Transform equation (1/s) with empirical data.
Interest-free models have worked throughout history and are currently
working now.

>>>     If there were zero inflation, there would still be something
>>>called the real rate of interest that comes from economic growth.
>>
>>     No there would not.
>
>     My, what an eloquent argument! Yes there would.  If you had ever,
>*ever* taken an economics class, you would be well aware that the real
>rate of return to a piece of physical capital is (under the assumption
>of competition) its marginal product.
>
     My response was trite because the statement was trite. Simply
stating an economic truism (falsism?) is not making an argument. If
there is zero inflation, it means that each chip is backed up on a
one-to-one basis. More chips put into circulation because more growth
has been pledged is not interest, it's called buying-in.

>>>     If at zero inflation, there was economic growth at 4%, there
>>>would be an equivalent real rate of interest, because that's what
>>>economic growth is - the real rate of interest.
>>
>>     Doesn't happen in the real world.
>
>     Of *course* it happens in the real world, you dumbass!  Why don't
>you clean the crap out from between your ears and look at some
>economic data.  Is there some theoretical reason why productivity
>cannot rise in the absence of inflation? I thought not. You have no
>idea what the hell you're talking about.

     My, my, losing control and resorting to name calling doesn't
prove your point. Control yourself and you'll see that the previous
answer applies here too. The original source of your confusion is that
you just can't conceive of tokens backed up one-to-one with
collateral. Evidently you haven't read my original submission and no
amount of losing control and resorting to name-calling is going to
change the fact that casino chips are a perfect liquidity which belie
all your false impressions.

>>>     There is also something called the time value of money, which
>>>says that a dollar today is worth less than a dollar tomorrow, even
>>>without inflation.  Wouldn't you value a dollar you received today
>>>more than a dollar you were promised to be given a year from now?
>>
>>     No. The time value of money is a scientific fantasy that makes no
>>sense at all if you are working with a properly functioning money
>>system.
>
>     Damn, you're an idiot.  Tell you what Mr. Engineer Man.  Since
>the time value of money is a fantasy created by us retarded
>economists, why don't you just give me all your paychecks for the next
>five years. I'll give them all back at the *end* of five years,
>adjusted for inflation.  Deal?  If there's no time value of money, you
>shouldn't have a problem with this scheme.  So what's the holdup?
>
     Sure I'd lend a friend my chips knowing that tomorrow or next
year they'll get me back exactly the same collateral that was used to
buy into the game with.
     Unfortunately, as long as economics is the only science that does
its measurement with a variable unit, the height of idiocy, they can
never be right.
     Using a variable unit to measure with is like using a rubber
ruler. You could ask 10 economists to measure your house and they'd
all come to a different answer as to its length depending on the
length of the unit tomorrow. But I'll believe someone who comes up
with a stick and tells me it's 5 sticks long, today and tomorrow.
     But once the value of money has been
stabilized, many of the theories economists have learned will start to
be successful and put to good use.
     And I never said all economists are retarded though I wouldn't
bet on it in your case.

>>>     These two influences, the time value of money and the real rate
>>>of interest, combine to set a nominal interest rate, even with zero
>>>inflation.  This is the formula for figuring it out:
>>
>>     A formula that uses two erroneous factors can't really work.
>
>     A nonsensical statement.  There's nothing in the above that is
>erroneous but your assinine claims.
     Try using chips as you try to reason through your arguments and
you'll soon find out how asinine is my claim that a 1/s money system
is perfect.

>>>    In other words, even without inflation, the value of $1 today is
>>worth only 67 cents 10 years from now because of economic growth.
>>     Gotcha! Not in a properly functioning money system. Check out my
>>previous post to understand why.
>        [More mindless crap deleted.]
>     You know what I think, John?
>
     Actually, I'm not impressed in what you think so far.

>I think you've got a bug up your ass because engineers are so
>mathematical and economists are idiots.
>
     No. Economists are simply using a non-stable unit to measure
with. The idiots are the ones who don't see the idiocy of using a non-
stable unit to measure with.

>Well, your head's up your ass.  To be a competent economist, you need
>just as much grasp over calculus, differential equations, and linear
>algebra as your typical fuckhead engineer.
>
     That what I said. And the only difference between engineers who
are always right and will bet on it and economists who are mainly
wrong is simply because of their non-stable measuring unit.

>In addition, you need real analysis and lots of statistics, and then
>some.
>
     It can't help if you're using a non-stable unit.

>     Since you don't have any idea what the fuck you're talking about,
>the only reason I'm wasting bandwidth pointing out how stupid you are
>is because you came off with such a condescending attitude, and you
>were *TOTALLY WRONG*!  Not one thing you have said is correct.
>
     Well, we finally agree on one thing. You are wasting band-width.
Telling me I'm wrong is a long way from proving it. And as an engineer
and professional gambler who is used to putting my money where my
mouth is, I can only use my favorite lines. "Put our money where you
mouth is. If you can't put up, then shut up."

>Do the world a favor.  Go home tonight and blow your head off with a
>shotgun.
>Fuck off, Victor Stango
>
     Boy, I really pushed some of your buttons, didn't I? But cursing
and name-calling are not preludes to rational discussion and they
certainly don't inspire confidence in the merit of your future
ragings.

John "The Engineer" Turmel, B. Eng.

     In article #27279, RDavies@exeter.ac.uk (Roy.Davies) tells about
many interest-free currencies throughout history.
     When furs were used as currency, inflation was impossible.
     When wampum, being a promise to pay issued by an individual,
there could be no inflation (unless he died and his heirs would not
honor his bead).
     Country pay of tobacco, rice, indigo, cash crops, did not
inflate.
>     Another early form of paper money used in north America was
>"tobacco notes".  These were certificates attesting to the quality
>and quantity of tobacco deposited in public warehouses.  These
>certificates circulated much more conveniently than the actual leaf
>and were authorized as legal tender in Virginia in 1727 and regularly
>accepted as such throughout most of the eighteenth century.
>
     Like casino chips, these certainly could not inflate.

>     Issues of paper money grew to become common in the colonies and
>were often excessive, causing inflation.
     As long as notes issued by the colonies were accepted in payment
of taxes, they should not have inflated but due to interest and
counterfeiting, eventually did. Not only did America use interest-free
"Continentals" but interest-free Greenbacks were introduced by Abraham
Lincoln.
Two notes used in America can clearly show the way,
Both legal tender now down south. They can be spent today:
"United States Note" issued by the nation's Treasury,
And "Federal Reserve Note" which is banker's currency.
Their fronts are very similar except the name they state,
Their backs are very different, it means another plate.
The Treasury provided notes for federal expense,
And taxed them back to balance books with numbers that made sense.
In 1913, other plates were given to the banks,
Creation of the money. They gave politicians thanks.
The Government had given banks permission to create,
A batch of brand new money to be lent at interest rate.
The Government then borrowed from them and at their request,
The Congress passed the Income Tax to pay them interest.
One Congressman objected, Louis T. McFadden, loud,
"The greatest crime in history," he said with head unbowed.
Ten dollars out, eleven back, it often takes a while,
But after years, the end result's a melancholy style.
The money from the Treasury, its use did almost cease,
To pay the interest to banks, the taxes did increase.
And when we ask "The Treasury, why is it never used?"
In answer, we get silence and an attitude bemused.
So to this day the bulk of the American supply,
Is borrowed from the banks at rates that make debts multiply.
All Governments do service debt by taxing you and me,
Instead of letting Treasury create it interest free.
I see no reason for a tax to pay them interest,
When use of plates by Treasury would lower taxes best.

>The British government acted at first to restrict and then to forbid
>the issue of paper money and this was one of the many acts of
>interference which caused the resentment which led, eventually, to the
>American Revolution.

    Right. Ben Franklin also said that they revolted over the Crown
banning their currency which had brought them so much prosperity and
not something as silly as a "tea-tax."

>     The American colonies were not unique in adopting strange methods
>of coping with a shortage of coins. From the Middle Ages up until the last
>century the English Exchequer used of tallies for accounting purposes.
>These were wooden sticks with notches cut into them, the width of the notch
>indicating the amount paid.
     Another perfect currency issued by governments and payable in
taxes.
A good example to point out was in the British Isle,
Where sticks of money they called "tallies" left the King with smile.
Accountants in the Treasury would split the stick in two,
One half would be the money and the other half its due.
A tally worth a pound of gold to pay the King's expense,
The other half amounted to taxation that made sense.
The tax collectors through the land all had an easy way,
Since people had their tallies and enough the tax to pay.
The tallies funded projects and could pay for everything,
By matching tallies to the tax, a hero made the King.

>     In 1880 there were still some 157 note-issuing banks in England
>and Wales.

     And if they charged interest, they suffered inflation.

>     Throughout recorded history there periods of excessive money
>creation causing inflation have alternated with periods in which
>currency was strong but in short supply, therefore restricting
>economic activity.

     I'm think that those currencies were strong not because they
were kept in short supply but because they were kept in proper supply.
Anytime a monetary token is issued one-to-one in exchange for either
goods or services, that is proper supply.

     Thanks, Roy, for the history of such currencies.

John C. Turmel, B. Eng.

     In article #27288, whitaker@usna.navy.mil (PROF A. R. Whitaker
(FEC FAC)) says:
>     Usury meant a charge for use, and I believe it was restricted to
>a charge for the use of money, and that only that was prohibited.
>
     Right. That's why Ezekiel said the wicked is he who exacted usury
or excessive interest. He did not condemn interest that was not
excessive with the absolute authority which he condemned usury.

>Later, a distinction was made between loans for persons in distress
>and loans for commercial (productive) purposes. Also, the word came
>to mean an excessive charge rather than just any charge. The charge
>has been made that the Church was accommodating to the needs of
>commerce, much as many Protestant churches are accused of having
>changed their teachings on, say, divorce, in response to social
>pressure.

     Right. Pressures made them change their teachings and the mess
we're in right now can be attributed the those changes. Of course, the
money-lenders are happy with the changes.

>It is clear that Aristotle did not understand the productive nature
>of exchange or of credit. It is clear that Calvin did.
>
     But is it further clear that Aristotle understood the
impossibility of the demand for more tokens than were issued and
Calvin did not.

>It is clear that at least one participant in this thread does not
>understand the use of nominal money as a convenient way of effecting
>exchange and extending credit.

     I've never said that money is not a convenience way of effecting
exchange and extending credit. I've only said that usury is a stupid
way to charge for that service.
     And it is clear that many participants in this thread do not get
the destructive nature of the usury demand on the economy. That's why
engineers with real science degrees are going to have to take a hand
in re-engineering the system economists with their pseudo-science
degrees have screwed up.

John "The Engineer" Turmel, B. Eng.

     In article #27295, whitaker@usna.navy.mil (PROF A. R. Whitaker
(FEC FAC)) says:
>     Yes, I think you are right in saying that the money is created in
>the hope that the "collateral" will materialize, but in terms of human
>behavior there is good reason to hope that.
>
     But why not create money as collateral is pledged? Then there is
no chance of inflation if the collateral fails to materialize.

>     Keynesians tend to think that the money supply has to increase
>faster than the maximum possible physical growth rate of output in
>order to induce businesses to take risks they would not other take,
>
     But with no foreclosure upon failure and the credit to try again,
businesses would take the risk.

>     But I believe all would agree that no monetary growth at all
>would slow growth considerably.
>
     True. If the casino refuses to issue new chips, the level of
action at the tables cannot go up. But casinos have an infinite supply
of chips ready to go and can accommodate all the action the
participants are capable of.

>     So the Fed increases the money supply in, as you say, the hope
>that the real output will materialize - but why do you call that a
>problem?
>
     That's a problem only in that if money were to follow production
rather than lead it, inflation as you know it would be impossible.

>     There would be a tendency for output to increase anyway, and
>monetary growth accommodates that tendency.
>
     Or monetary growth increases anyway and output tends to
accommodate that tendency.

>     The fact still remains that excessive monetary growth creates
>inflation - there's no way that creating still more money will reduce
>inflation. Any demonstration that it would, or even could, belongs
>with the proof that 1=0.

     That would be true if inflation is more money chasing the goods.
But if inflation the same money chasing less goods (due to interest),
more money would reduce inflation by confiscation.
     If inflation were really too much money, people's wallets would
be full and store shelves would be empty as people spend it as fast as
they get it. But people's wallets are empty and store shelves are full
indicating that the inflation we're talking about is not in increase
in money but a decrease in collateral generated by foreclosures due to
interest.
     In the story about Argentinian provinces creating their own
money, the international bankers expressed fear that inflation of
1,000% would get worse. Actually, inflation went down to 36% which is
a good indication that more money helped ease the foreclosure
situation.
     But in the final analysis, whether money creation leads or lags
collateral production is not my primary concern. It's usury, the
demand for more money than was created in the first place. Until we
abolish that impossible demand, foreclosure inflation due to losers in
the mort-gage death-gamble will always be a problem.

John "The Engineer" Turmel, B. Eng.

     In article #27332, bgoffe@whale.st.usm.edu (William L. Goffe)
says:
>>>     And if I use the 100 pieces of gold to buy 100 head of cattle,
>>>and you ask for 105 pieces of gold back next year when I've got 110
>>>cattle?

     I answered:
>>      This is a standard economic fantasy. If banks accepted head of
>> cattle in the payment of interest, there would be no problems. But
>> they don't and no amount of wishful thinking will change that.

     He asked:
>Why would the bank want cattle? What about other such payments they'd
>receive, such as pigs, wheat, corn, cotton, apples, oats, rice,
>squash, oranges, bananas, pears, etc. Wouldn't the bank much prefer a
>standard medium of exchange? If I were a bank I sure would.

     The only reason the bank might want cattle, etc, would be to
avoid the problems from the impossible demand for usury.

>>      The mort-gage contract calls for 105 pieces of gold and no matter
>> how many head of cattle you produce, you can never pay the extra five
>> pieces of gold.

>Why not sell the cattle to someone else for the 110 pieces of gold?
>Is the bank conspiring with all those who might buy cattle to exclude
>this?

     This assumes some external supply of gold. Remember that the
original premise is that everyone borrows 100 as you did to pay for
production and everyone is trying to sell his product for 110. If you
are successful, the 10 extra you obtained was obtained out of someone
else's principal in which case that person will fail in his mort-gage
death-gamble.

John "The Engineer" Turmel

     In article #27334, swo6176@tamsun.tamu.edu (Sean William Jr.
Odonnell) says:
>     John Turmel said:
>>     My response was trite because the statement was trite. Simply
>>stating an economic truism (falsism?) is not making an argument. If
>>there is zero inflation, it means that each chip is backed up on a
>>one-to-one basis. More chips put into circulation because more
>>growth has been pledged is not interest, it's called buying-in.
>
>     "Buying-in"?  I don't think that is how the Fed or the Treasury
>dept. look at it.  However, it seems that everyone is looking at
>interest like they had just read Business Week or watched Wall Street
>in Review.  What is interest?  Quite simply, it is the price of time.
>In terms of capital, it is the rent.  It is not the cost of money, or
>whatever Louis Ruckeysier (whose name I can not spell) may say.
>
     Call it any thing you want but it is still a demand for more than
was created, a demand which is physically impossible for the group as
a whole to fulfill.
     And nevertheless, a casino cashier calls liquifying collateral
"buying-in for chips" while orthodox banking calls it "lending chips."

>     Hmm, here there seems to be two problems.  Of course you can
>have growth without inflation, if we had a REAL good money supplier,
>that could definitely happen.  As for the idea of casino chips, well,
>I think that perhaps you are looking at money as nothing more than a
>veil (to paraphrase David Humes), or that it is oil in the machine.
>It is not.

     Tokens are merely a representation (veil) of the wealth backing
them up.

>>     Sure I'd lend a friend my chips knowing that tomorrow or next
>>year they'll get me back exactly the same collateral that was used to
>>buy into the game with.
>
>     Boy, St. Thomas Aquinas would be very proud of you.  Question, if
>you lent money to your friend, what are you giving up?  You
>unfortunately only see it as giving up tokens, but lets say you didn't
>give it to your friend, instead investing in, say, a hot dog maker.
>In five years (assuming that is the time period you lend money), where
>are you better off?  Just getting back the tokens you lent, or
>realizing return on your investment through the fortune you made in
>the hot dog business (or the return on capital investment, however you
>want to look at it).  So, interest is not simply the cost of money, as
>demonstrated by the simple frank.

     I am but fulfilling the New Testament dictum in Paul to the
Corrinthians 8:14 that:
     "My abundance should at the present time be a supply for his want
so that later, his abundance may be a supply for my want."
     If I help my neighbors be successful with my abundance, I do give
up my usury (which hopefully I'll never need if I continue to be
successful) but I also get more successful neighbors who are then able
to help me out if ever I lack abundance. That's all I need. "Do unto
me as I've done unto you." I don't need part of his earnings, only my
loan back if he's successful and the knowledge that I can get a loan
under the same conditions if I'm ever in need of his abundance.

>>     Unfortunately, as long as economics is the only science that does
>>its measurement with a variable unit, the height of idiocy, they can
>>never be right.
>
>     Interest rate is not a measurement.  It is a percentage, big
>difference.
>
     I didn't say that the interest rate was the variable measuring
unit. I meant that the dollar was the variable measuring unit.

>>     That what I said. And the only difference between engineers who
>>are always right and will bet on it and economists who are mainly
>>wrong is simply because of their non-stable measuring unit.
>
>but who told you that economists use
>non-stable units of measuring?  Are you talking about the dollar not
>being a stable unit of measurement?  Then you need to realize the
>difference between real and nominal.
>
     No matter how you cut it, you never know what a dollar which is
subject to inflation will be worth tomorrow. That is a non-stable
measuring unit compared to an inch whose length you can be certain of
tomorrow.

>>>Do the world a favor.  Go home tonight and blow your head off with a
>>>shotgun.
>>>Fuck off,
>>>Victor Stango
>>
>>     Boy, I really pushed some of your buttons, didn't I? But cursing
>>and name-calling are not preludes to rational discussion and they
>>certainly don't inspire confidence in the merit of your future
>>ragings.
>
>     Well, that is really uncalled for.  Is this really worth getting
>THAT upset about?  If you think the guy is wrong, then more power to
>you, let him wallow in his ignorance.  If you are having a problem
>with some of this stuff, well, you weren't the first economist to,
>just go ask someone, they are bound to straighten him out.

     I received a message from a friend of Mr. Stango's who informed
me that:
>John -
>I happen to know Victor Stango personally.  It is a fact that he did
>*not* write this reply to your post.  Rather, he left his terminal
>logged on when he left the room, and both of you have been the
>victims of a cruel prank.

     My responses were therefore not meant for Mr. Stango but for the
gutless wimp who hid behind his name to post those irrational
rantings. I hope Mr. Stango forgives my put-downs which were meant
only for the writer of the message.

John C. Turmel, B. Eng.

     In article #27346, gsmcinto@uxa.ecn.bgu.edu (Steven E. McIntosh)
says:
>John Turmel (johnturmel@yahoo.com) wrote:
>:      In article #27263, gsmcinto@uxa.ecn.bgu.edu (Steven E. McIntosh)
>: says:
>:
>: >You can say that if you charged a higher rate of interest, or indeed
>: >any interest at all, you are increasing the money supply.
>:      Check out your basic economics text book and you'll find out that
>: the money supply is increased upon the granting of a loan by a bank.
>
>That is the mechanism by which the government increases the money
>supply, but they could just as easily if not more do it by cutting a
>check to whoever they want.

     So why borrow it from the private banks and pay them interest
when "they could just as easily if not more do it by cutting a check
to whoever they want" INTEREST-FREE?

>: Money is created at the point of the granting of the loan and
>: interest has no effect on monetary mass. Charging interest does not
>: not increase the money supply. It only increases the debt. With debt
>: growth and no money supply growth, that results in the imbalance which
>: causes the chronic insufficiency of money to repay the debt.
>:
>
>The mechanism by which the banks increase the money supply is the
>charging of interest.  High interest rates would increase the money
>supply more than low interest rates if the same amount of money was lent
>out at the two interest rates.  But a rationing effect takes place so
>that fewer people borrow money at higher interest rates.

     The mechanism by which the banks increase the money supply is the
granting of loans, not the charging of interest. We have a direct
contradiction needing evidence. Out positions are staked out and I'm
just going to have to bet that I'm right. We can't continue repeating
where we think the source of the money is. You evidently have not
drawn the control system defined in my previous post. So get your
proofs together and your resources and we'll put it to a vote.
     You should draw the (1/(s-i)) control system. If you can use it
to tell me the output balance would be over 10 years with an input of
1 at 10%. Tell me the output balance with inputs of 1 every year for
10 years at 10%.
     Once you understand the control system of your bank account
(1/(s-i)), look at the control system without the interest positive
feedback (1/s). Then watch the chip system at your nearest Poker game
until you see the link.

>A token is a form of money that inflates like money ("buying in"), and is
>also a commodity like money (it's made out of metal and or cotton), and
>is worth more than what it's made out of because of what it can be used
>for, just like a Van Gough is worth more than the paint and canvas it's
>made out of.  The only difference is the use of it, and as a concept
>connected with the object, the whole representation has an inherent
>worth in and of itself.
>Your EE degree doesn't make you a shit's worth of an economist and your
>occupation as a gambler makes it also apparent that you don't value your
>money or what else it can do in abstract terms, which is fundamental to
>a decent understanding of economics.
     Is there someone out there who can go over the inflation question
with him using a $100 casino chip backed up by a barrel of oil.

>Like I said, the concept of what that lumber and cotton in that
>particular combination with that art can do taken as a whole
>representation has an inherent value in and of itself which is very
>high.
>Money is a commodity that is used to facilitate exchange.
     So what's the inherent value of the blips in a bank's computer
that you move around with checks? Where's the commodity value? Wake
up. Money is a paper, metal, electronic document. A mere number
representing your share of the assets backing it up in the cage. A
mere token.

>The value of all these things can increase due to their real and/or
>relative scarcity.
     This is failing to distinguish between price rises due to
scarcity of capital and price rises due to scarcity of tokens.

>>So money would become scarce and then cause in hyper-inflation.
>
>That's what I said.
>
     Why did inflation from drop to 36% when six Argentinian provinces
started paying all their bills with self-issuing interest-free
provincial bond currencies and International Bankers fretted about
inflation getting worse. In the only government-controlled money
experiment in recent history, why did increasing the money supply
drastically bring down unemployment and inflation so drastically? I
leave that reverse expectation as a poser to muse over.

>A service charge or rake-of is a form of interest.  It is charging for
>the use of tokens just like a bank charges for the use of money.  It's
>just called something different.

     Just because you can't see the difference between Interest Island
and Service Charge Island in my initial posting doesn't mean others
haven't. I'll always bet on the guy who says he can see versus the guy
who says he can't.
     Like those little picture games where you have to find the
differences in the two pictures, if one person says he sees a
difference and the other person says he can't, who are you going to
believe. Obviously the guy who can, not the guy who can't.

>This concept is the same as the casino charging a high service fee
>causing gambling to decrease, and a low service fee causing increased
>gambling.
     No. A high rake-off doesn't cause the gambling to increase. It
shortens the length of the game.

>: >However, low interest rates *can* increase inflation and increased
>: >inflation *can* slow economic growth in the long run.
>:      Low interest rates can't increase inflation. Inflation is a
>: direct function of interest rates. Low interest rates generate some
>: inflation, lower ones generate less and no interest generates none.
>:
>
>Maybe in the short run. But in the long run, low interest rates cause
>economic growth to increase, which raises the price of commodities
>that fuel production, which is inflation in the price of commodities.
>
     Trying to distinguish between the effects of low interest and
high interest is begging the question. Let us distinguish between the
effects of no interest and some interest first.

>Usury will cause economic growth to slow, which will decrease
>commodity prices in the long run.  This will in turn lower the prices
>of finished goods that use commodities in their production, causing
>an increase in the quantity of finished goods demanded.  That will in
>turn spur economic growth which will increase commodity prices, and
>so on.
     No matter how you figure it, if you charge the manufacturer
usury, he passes that cost along to his customers and prices must go
up. Raising interest costs cannot lower prices, they must be passed
on.

>:      All interest rates are usurious. There is no cut point. If you
>: think there is, what is it?
>:
>
>Around 10%.
>
     Why? Why not 5% or 15%?

>"Buying in" is the same as inflation and "rake-offs" are the same as
>interest.

     Buying-in certainly adds to the chips in circulation but it also
adds to the collateral in the cashier's cage. How you think buying-in
causes inflation should make for merry conversation with my Poker
buddies.

>: John "The Engineer" Turmel, B. Eng.
>
>More like John "The Loser".
>
     I think we'll let history decide who knows more about the
engineering design of the banking system. Some people are catching on
that the LETSystem which is successfully being used around the world
is nothing but an interest-free computerized poker chip system based
on manpower as collateral. I know it takes a lot of un-learning to
accept the simplicity of the solution but I'm finding that others are
over-coming their cognitive dissonance a lot better than you are.

John "The Engineer" Turmel, B. Eng.
     In article #27352, allsop@fc.hp.com (Brent Allsop) asks:
>
>Does money get into circulation any other legal way?
>
     Yes. Every time you make a loan at a bank, the component of
computer money that is used between bank computers that you write your
checks on goes up. Money supply increases when banks make loans since
they create it right in their computers.

>This is almost like simply printing money and spending it but it
>effects us all in the same way right?  And this is very different than
>congress or anyone just printing cash and spending it!
>
     That's right. If Congress printed cash, spent it and taxed it
back at the end of the year is a lot better than letting the private
banks create it, borrowing it from them and taxing us to pay them
interest we wouldn't have to pay if Congress ran the money system.

>No one can just print and spend money right?
>
     No but some people can print and lend money at interest which
works out quite well for them. Especially when the government that
gave them that power is first in line to borrow.
Does

>It says somewhere that congress or anyone can't just print and spend
>money?
>
     That's too bad for two reasons. Congress and not private
corporations should print and spend and tax back money yet private
corporations have been given the license to print and lend at usury.

     Just imagine that Government had a huge bank of tax-credit casino
chips to be exchanged for work from anyone who wanted to pay their
taxes. Everyone would take them and there would be no interest.

John C. Turmel, B. Eng.

     In article #27359, From: RDavies@exeter.ac.uk (Roy.Davies)
Subject: Re: Money money money(arw)
Date: Sat Nov 12 06:12:20 1994

#johnturmel@yahoo.com John Turmel writes:
#>
#>      In article #27279, RDavies@exeter.ac.uk (Roy.Davies) tells about
#> many interest-free currencies throughout history.
#>      When furs were used as currency, inflation was impossible.
#>      When wampum, being a promise to pay issued by an individual,
#> there could be no inflation (unless he died and his heirs would not
#> honor his bead).
#>      Country pay of tobacco, rice, indigo, cash crops, did not
#> inflate.
#
#Thanks for your comments on my note, John.  However I must take issue
#with you on your claim that inflation can be avoided as long as interest
#is not charged.  In theory it would be possible to charge interest on
#loans in any type of currency, e.g. if we used tobacco as money and you
#wanted a loan I could say I would give you 100 pounds of tobacco (in weight
#not British pounds sterling!) provided you repayed me 110 pounds next
year.

     Sure. But tobacco reproduces. Gold does not. I never said
interest on livestock is unpayable. I've always said interest on
sterile gold is unpayable thereby causing a mort-gage "death-gamble."

#    More importantly excessive increases in the quantity of
#commodities used as money can lead to inflation just as an excessive
#increase in the printing of banknotes can.  The book I quoted (A
#History of Money from Ancient Times to the Present Day by Glyn Davies)
#gives a specific example involving wampum.

     I don't understand how a wampum bead promising me a horse could
buy less and less of the promised horse year after year. Could this
have been value changes in prices due to scarcity and abundance of
other products?

#Some tribes such as the Narragansetts specialized in manufacturing
#wampum (by drilling holes in the shells so that the beads could
#be strung together) but their original craft skills were made
#redundant when the spread of steel drills enabled unskilled
#workers, including the colonists themselves, to increase the
#supply of wampum a hundredfold thus causing a massive decrease
#in its value.  (A factory for drilling and assembling wampum
#was started by J.W. Campbell in New Jersey in 1760 and remained
#in production for a hundred years).

     So they got away with a kind of counterfeiting. Yet if each bead
which said "worth one horse" or "worth one day's work" was spent for
one horse or one day's work, I don't see why inflation would have
occurred.

#Another example given in the book involves the use of cowrie shells
#in Uganda.  Cowries had long been used as money in many parts of the
#world but were first introduced to Uganda towards the end of the
#eighteenth century.  Then two cowries were sufficient to purchase a
#woman but as trade with the coastal regions of Africa grew the number
#of cowries circulating in Uganda also grew rapidly and in 1860 a
#thousand cowries were necessary for the purchase of a bride.  Later,
#as cowries became still more plentiful they naturally depreciated
#even further (though they were still accepted in the payment of taxes
#until the beginning of the 20th century).

     So there was a growth of the supply of cowrie shells without
commensurate growth of the assets backing them up. This is always a
question of a chip system. You say their chips lost their value and I
must expect that they their cowries did not remain linked to
production for long.
     I do not deny that an increase in the money chasing the
production would generate inflation, Shift A, but I do insist that
there is a possible Shift B inflation which is a foreclosure of
collateral backing up the same amount of money. Both shifts feel the
same but differ on in their cause. I submit that the inflation we are
experiencing is not too much money in circulation but too much
collateral being seized in foreclosure.
     I would point out the Argentine experience when six Argentine
states issued their local currencies and despite fears of inflation
which had been running at 1,000% per year, the increase in currency
brought inflation down to under 40%.
     If inflation really is being caused by disappearing collateral
from the cage making the chips in circulation less valuable, then
adding currency to circulation reduces that kind of inflation. I've
posted this in a much more detailed manner earlier.

#Therefore controlling the money supply so that inflation can be
#avoided without restricting economic growth is a perennial problem.
#Despite thousands of years of experience in the use of money mankind
#is yet to find a really satisfactory answer to that problem.

     Tallies worked flawlessly for centuries as a financial accounting
system. I see no reason why paper, metal or computer tokens can't run
as perfectly. Money is nothing but accounting software and and there's
no reason it can't be made to account properly.

John C. Turmel, B. Eng., Leader
Abolitionist Party of Canada.

     In article #27368, swo6176@tamsun.tamu.edu (Sean William Jr.
Odonnell) in Newsgroups: sci.econ Subject: Re: Inflation and Money
Supply Sun Nov 13 14:54:17 1994 said
#
#In article <Cz5BIn.L3y@freenet.carleton.ca>,
#John Turmel <johnturmel@yahoo.com> wrote:
#>
#>     In article #27344, hfinney@shell.portal.com (Hal Finney) says:
#>>     Mr. Turmel's model is based on a fixed-size money supply.
#>     No. A casino banking system is based on a totally flexible number
#>of chips issued from an infinite chip supply.
#
#Even if a casino has an infinite chip supply (which it can not possibly
#have), how does it support its chip supply?  Are you naive enough to
#think that people see chips and go "ahh, duh, this will work as money"?
#Again, you lack a complete understanding of money.
#Sean O'Donnell Texas A&M University

     My casino has an infinite supply of tokens. Tell me any value of
a token you wish and any size of economic activity you wish to
liquefy, and I'll provide that number of valued tokens. There is no
amount of collateral I can't liquefy since issuance of tokens is based
on collateral one-to-one. Certain things are infinite and providing an
infinite number of tokens is one of them.

     In article #27369, he also says
#In article <Cz5BKs.L6x@freenet.carleton.ca>,
#John Turmel <johnturmel@yahoo.com> wrote:
#>     This assumes some external supply of gold. Remember that the
#>original premise is that everyone borrows 100 as you did to pay for
#>production and everyone is trying to sell his product for 110. If you
#>are successful, the 10 extra you obtained was obtained out of someone
#>else's principal in which case that person will fail in his mort-gage
#>death-gamble.
#
#Hmm, I see your problem now, it is not only that you fail to understand
#the origins and purposes of money, but you also seem to entirely miss the
#idea of value. Your first mistake is in thinking that the market is a
#zero-sum game rather then realizing that exchange is to the benefit of
#both parties, or they would not exchange.

     The origins and purposes of money are to be tokens to facilitate
exchange. It's not that hard if you've ever worked as a casino
cashier.
     I never said that the market is a zero sum game. Actually, I
believe it is not. I know that at a Poker table, what one player loses
another player will win. A zero sum game. But at a table where they're
paying interest to use the chips, even if there are no winners, there
must still be a loser. Not a zero sum game.
     Tell me about all these auction sales to the benefit of both
parties.

     In article #27370, he says:
#In article <Cz5Bov.LBD@freenet.carleton.ca>,
#John Turmel <johnturmel@yahoo.com> wrote:
#>     Call it any thing you want but it is still a demand for more than
#>was created, a demand which is physically impossible for the group as
#>a whole to fulfill.
#>     And nevertheless, a casino cashier calls liquifying collateral
#>"buying-in for chips" while orthodox banking calls it "lending chips."
#
#Second, I refer you to Say's Law, to demand, you must supply (not
#supply creates its own demand), because you seem to have a
#misunderstanding of market institutions.

     Yes. That is exactly what I propose. That supply creates its own
demand. The more collateral and products you bring to my casino cage,
the more tokens (demand) will be issued in exchange. As supply goes
up, demand goes up one-to-one.

#     And second prime, Walras' Law, which tells us that Sigma(Excess
#Demand over all markets) = 0. These are very simple concepts to
#understand...

     And I'd think that the concept of "zero excess" demand by a one-to-
-one demand to supply ratio would be just as easy to grasp.

#>     Tokens are merely a representation (veil) of the wealth backing
#>them up.
#>
#WRONG!  Ah ha, you have admitted your error.  In a message past, you
#mentioned how banks might take cows, etc, etc, etc.  Indeed cows once
#were an acceptable form of exchange (ie, ancient Ireland).  Stones in
#other countries, etc, etc.  A more tangible (at least temporally
#tangible) is POW camps.  What became their medium of exchange?
#Cigarettes!  Not tokens, not worthless sand, not leaves, but cigarettes.
#Why cigarettes?  Well, I think that it is obvious.
#
     Sorry. If non-smokers pledged their cigarettes to a casino
cashier for chips, those chips would be just as valuable in the camp
as the actualy cigarettes themselves. That's what I keep saying. The
medium does not have have to be of intrinsic value and the medium only
needs to be of intrinsic value when you don't have a casino cashier
you trust.
 

#"To one he gave five talents of money, to another two talents, and to
#another one talent, each accoring to his ability.
# <Parable of the Talents Matthew 25:14>

>So, that has been an important lesson for us today.
>Is Mr. Turnball, 1) not reading his Scripture, or 2) going to be
>thrown out gnashing his teeth?  :)

     Mr. Turmel has already posted TURMEL POEM: Bible Economics which
deals with the Parable of the Talents and that very
misinterpretation. Check out my interpretation and comment again.

#>     No matter how you cut it, you never know what a dollar which is
#>subject to inflation will be worth tomorrow. That is a non-stable
#>measuring unit compared to an inch whose length you can be certain of
#>tomorrow.
#>
#Law of motion.  There is stock, and then there is flow.  Stock is
#easy to measure, it already exists, right there, for us to see.  But
#when something is flowing, well, it is changing, accruing, pouring
#into our stock.  Do I say that temperature is a flawed unit of
#measurement because something can change in the future?  Do I say an
#inch is flawed because a tree ten inches today is not tomorrow?  How
#about time?

     You're missing the whole point. I'm not saying a degree is a non-
stable unit. Nor an inch. So of course, I don't say that temperature
or inches are flawed like I say money is flawed as a measurement unit.

#Let's take this further, into space and gravity.  Certainly we know
#that time and space change with respect to gravity wells.  How about
#when someone is travelling the speed of light (lets say they could),

     Let's not take it to the physical world since money is an
abstract accounting unit in a ledger book. It can be made to account
perfectly since there are no physical limitations.

     In article #27381, he also says
#Look, Turmel's analysis is fundamentally flawed and has been
#sufficiently debunked.  The only thing left for us to do is wait for
#him to learn some more economics and return as a neophyte
#appreciating the science of economics.

     My how easily the economist is impressed that my argument has
been debunked. No one debated me on the Laplace transforms. No one
dealt with the differential equations, the exponential functions.
Many have claimed that economists have just as much math as engineers.
The only difference is that you don't use it. So without once getting
into the math, he is convinced that the math he didn't get into has
been debunked. My how easy a life it is when you can evade the the
math and simply cling to pronouncements from on high.

     In article #27434, (Sean William Jr. Odonnell) says
#In article <Cz0DJx.Jrr@usna.navy.mil>,
#PROF A. R. Whitaker (FEC FAC) <whitaker@usna.navy.mil> wrote:
#>     Usury meant a charge for use, and I believe it was restricted to a
#>charge for the use of money, and that only that was prohibited. Later, a
#>distinction was made between loans for persons in distress and loans for
#>commercial (productive) purposes. Also, the word came to mean an excessive
#>charge rather than just any charge. The charge has been made that the Church
#>was accommodating to the needs of commerce, much as many Protestant churches
#>are accused of having changed their teachings on, say, divorce, in response
#>to social pressure.
#
#Christ did not say that charging interest was equivalent to theft.

     Maybe be didn't say it was equivalent to theft but taking to the
money-lenders with a whip isn't what I'd call ringing approbation. And
all his other anti-usury pronouncements and parables certainly make is
condemnation of the yoke of oppression quite obvious.

#Sure the Church taught that usury was immoral, but there is a
#substantial difference between issues of teaching and what Christ laid
#down as law.

     The problem was not that the Church taught that usury was immoral
in violation of Christ's say but that it stopped teaching that.

#It means that at that time, with the understanding of interest and
#morality, it seemed the right thing to do.

     And though going against the Good Book seemed right at the time,
it turned out to be a misunderstanding of interest and still wrong.

#Also, remember that it was the Italians who were the first to get around
#the usury laws,
#Ways that helped the Church realize that interest was not immoral.

     Helped the Church realize that "death-gamble" was not immoral?
Helped the Church fail to realize that usury was always immoral.

#>     It is clear that Aristotle did not understand the productive
#>nature of exchange or of credit. It is clear that Calvin did. It is
#>clear that at least one participant in this thread does not understand
#>the use of nominal money as a convenient way of effecting exchange and
#>extending credit.

     You seem to have confused my opposition to interest being
charged to nominal money being used. I'm for the use of money as a
convenient way of effecting exchange and extending credit. I'm against
the charging of interest. Please try to stop confusing the two
concepts.

#May I remind you that St. Thomas Aquinas had a very good idea
#of exchange, as did Plato.  They both realized that exchange leads to
#mutual satisfaction.  Indeed, St Thomas Aquinas understood the idea of
#rent on land, etc.  He just never came to the realization that interest
#IS rent on money.
     Renting something which offers produce like land is not the same
as renting something which does not offer produce like gold. You guys
just don't get my grandfather's dictum that "You can't pay usury
because money has no babies."
     This is really the major point of contention of this whole
thread. Some of us believe that money is sterile and others believe
money has babies. And I guess never the twain shall meet.

     In article #27397 Robert.Vienneau@launchpad.unc.edu says:
#Not to defend John Turmel, but it seems to me some of his opponents
#have been dogmatic where humility should prevail. At least, some
#economists disagree with some of their assertions.
#Interest and inflation are distinct concepts. But the claim that
#interest is the marginal product of capital is without foundation.
#Similarly, the idea that interest expresses the time value of goods,
#the result of trading off some consumption now for additional
#consumption later, has been shown to be weak.
#An alternative theory considers interest to be a reflection
#of profit obtained in production, where, in turn, profit is how
#a physical surplus is realized in a capitalist system.

     In article #27516, degroff@netcom.com (21012d) says
#Mr. Turmel's casino collateral required
#system with its buyin and posting, gives most of the control to the
#"chip" issuers, this is not a trivial issue, it is pretty much the
#same as the banks.

     Except that buying in for chips liquidity charges no interest
while mortgaging in for money liquidity does charge interest.

#The banks evolved in and from an environment of real risks and real
#losses, and one of the solutions to avoiding a broken bank was
#interest.

     But interest creates the risk in the first place. The ratio of
I/(P+I) where I=interest and P=principal must always be knocked into
foreclosure. Saying we need interest to compensate for the loss
generated by interest does not follow.
     If producers could pledge their increase for tokens at the cage
and people were being paid interest, then it would be a reflection of
profit.
     But producers have no way of converting that increase into money
with which to pay the interest that is demanded in money, not product.
So what interest is considered to be is a long way from what it really
is and what it really does.

John C. Turmel, B. Eng.
 

                            TURMEL'S BACK

     In article #27744, Markku Stenborg <marsten@utu.fi> says:

#In article <D00I3H.EvG@freenet.carleton.ca> John Turmel writes:

##     My how easily the economist is impressed that my argument has
##been debunked. No one debated me on the Laplace transforms. No one

#Of course it has been debunked. You are just too stubborn to listen
#to any argument,

     I am not too stubborn to listen to any argument. I just will not
take any argument presented only in English too seriously when I
opened the debate in various Mathematical languages with posted
equations. How can the equations be debunked when you haven't even
reproduced one in your debunking. Only in Economics do they try to
debunk math in English.
     Nowhere have you shown you have the required
math to even enter the debate. I say I'm an engineer and hope it's
proven by my use of Math. You speak of the Math only in prose. I will
not cede the inference that you're qualified to participate in
mathematical debate until you have at least mentioned the easier math
somewhere in your critique. These discussions are laboratories and if
you can't take the heat of mathematical debate, get back to your
kitchen.
     Even if you don't have the math, why don't you ask an engineer to
debunk it in math for you. Now there's an interesting challenge. Get
an engineer to put up his oath of scientific integrity against mine
and debunk it by translating your English into Engineering math. I'll
make a $100 challenge that nobody can get any qualified
engineer to post an argument Bet nobody finds one.

HYPOTHESIS:
     That a zero-interest monetary system (like a casino chip bank)
suffers zero inflation (without natural disasters), zero involuntary
unemployment and 100% voluntary employment.
     That inflation and deflation are not caused by natural disasters
or surpluses (financial disasters) but are due to manipulation of
interest rate alone.
     That everybody can have a job and the medium of exchange is
backed can be backed one-to-one with work produced.

#you seem to believe on the method of *Proof* *by*
#*Repeated* *Assertation*.

     Of course, repeated assertion is not proof of an issue. But my
original assertion was that my math is right. Since then, the only
repeated assertion is that no one is answering it in math. My repeated
challenge is to put your math where your mouth is.
     Kids get the difference between Interest Island and Service
Charge Island right away.
     Do you expect me to take seriously the clowns who stated that
"money has babies" as a debunking of the equations which show "money
has no babies." Do you really believe they have photos of pregnant $20
bills? I don't. No one has explained such a reproductive capability
backing up their conclusion that "Since money has babies, therefore
interest is payable."
     Try explaining this to a kid:
     Everybody borrows a "Mama and Papa" pair of $5 dollar bills. At
the end of the year, everybody has to return the "Papa and Mama" and
one or two baby $1 dollar bills as interest.
     "Where do those who pay their baby $1 bills in interest really
get their baby $1 bills?" Hint: Mort-Gage translated into French means
Death-Gamble. They chopped one of the Mama and Papa pairs of $5 bills
because money really doesn't have babies.

#My guess is that anyone w/ any idea of
#Economics, Finance, Accounting, etc., sees that you just don't get it,
#and don't bother to waste time anymore.

     Studying Economics, Finance, Accounting, etc., unfortunately adds
to the brainwashing. People who haven't studied these false religions
have a much easier time grasping how casino chips could bank the
world's assets interest-free, inflation-free, unemployment-free. It is
far more difficult for the less educated to see how the money has
babies which enable people to pay their interest.
      You've been trained to believe that a perfect token system is
impossible because tokens suffer psychological phenomena. You cannot
imagine how ridiculous the future will view you guys who think running
a perfect money token accounting software is hard to do. Especially
with more and more casinos opening up around the world to demonstrate
the perfect model banking liquidity system.

##dealt with the differential equations, the exponential functions.
##Many have claimed that economists have just as much math as
##engineers. The only difference is that you don't use it.

#Math is of NO use unless you know what you are doing with it, your "math
#posts" are just another example of the famous system of *garbage* *in*,
*garbage* *out*.

     To date, I can't tell if any of you even know what a Laplace
transform is. My analysis included the wonderfully sophisticated power
of imaginary numbers, your debunking didn't. Perhaps you think
imaginary numbers provide imaginary arguments.
     You may not know what a differential equation is. I argued with
them but I didn't see them in the general debunking.
     You may not know what an an exponential function is. I argued
with them but the debunking you're so proud of has them nowhere to be
found.
     We don't even know if you've even mastered the necessary Grade 8
algebra because your debunking didn't have those equations either.
     Failing to cope with even the Grade 8 algebra indicates you're
certainly not an engineer and I did not expect you to handle the
control system blueprint.
     An Engineer, equations on the blackboard, is in the arena of
debate waiting for response and no amount of heckling from the
sidelines can detract from the fact that no one has stepped up to the
blackboard and challenged the equations. Though you crow that the
equations have been debunked, please be fair and make sure to note
that you didn't do your debunking at the blackboard.
     Finally, not having demonstrated any mastery of mathematics, I
cannot even grant the inference that you're as qualified to be in the
garbage industry as you say you are.

   1/(s-i) ACCOUNTING IS THE PROBLEM. 1/s ACCOUNTING IS THE ANSWER

     In article #27746, Markku Stenborg <marsten@utu.fi> says:
#In article <D00I3H.EvG@freenet.carleton.ca> John Turmel, writes:

##     My casino has an infinite supply of tokens. Tell me any value of
##a token you wish and any size of economic activity you wish to
##liquefy, and I'll provide that number of valued tokens. There is no
##amount of collateral I can't liquefy since issuance of tokens is based
##on collateral one-to-one. Certain things are infinite and providing an
##infinite number of tokens is one of them.

#OK, send me all your tokens, and I'd prefer the infinite amount to
#any finite.

     Tell me the largest amount you want, I'll put a denomination
10 times as large on one token and then send you 10 tokens. Did you
forget that denominations of my chips don't run out? Ask any casino
owner if he can come up with chips for a trillion dollar game and the
answer will be always be yes. "Call the reds a billion" is all he has
to say.
     But first you must tell everybody the value of the collateral you
offer me to get that many of my chips. Let's do it like a bank.
Produce three estimates on the property and I'll issue chips to you
based on the average.
     Perhaps this is a better restating. Instead of saying I have an
infinite supply of chips ready to go which could be taken as meaning
an infinite number of physical token, an impossibility, I'll say that
because the casino can command "The Reds are a billion each" and "the
Blues are a trillion each" and any color or denomination wanted, a
casino bank can handle an infinite number of denominations and is not
restricted by the non-infinite number of physical chips. A casino bank
has the capacity to handle up to infinite collateral buy-in. So
without claiming I have an infinite number of physical tokens, I do
claim I have chips sufficient to cater to up to an infinite demand.
      There must be some Poker players out there who can explain
casino chips to these guys. Do economists not play games of mental
agility like Poker? Do they never practice betting on their decisions.
I think that it's a sad spectacle for supposedly-educated guys to
admit that they didn't see how a casino bank could be viewed as having
an infinite supply of liquidity because it could liquefy an infinite
amount of collateral through denomination variation. How elementary.
     Forgetting that the same plastic token can be denominated is a
throw-back to the days of archaic gold standard where the bigger the
coin, the more it was worth. They ran out of liquidity when they ran out of
gold. They automatically thought "He's going to run out of plastic."
No casino would ever run out of liquidity even if it did run out of
plastic as denominations not based on weight solve that problem.
     Despite the foolish objections and commentary, I've had to face
some very thoughtful and insightful questions from others who seem
willing to consider that the token liquidity system may not be as hard
to correct as they once thought. I can imagine the cognitive
dissonance that a Poker-playing economist might be facing after a
lifetime of teaching that the perfect operation of monetary tokens is
hard to accomplish. Could Ceasar's Palace really run an asset- and
labor-based casino chip system for the whole world which would be
inflation-free and involuntary-unemployment-free because it was
interest-free? The Engineer says yes.

     When I undertook my self-financed project to correct the unsafe
engineering design of the world computerized money system 15 years ago
(right after Ralph Nader had finished his crusade against the unsafe
engineering design of cars), I felt I had the necessary qualifications
to tackle the world's computerized "mort-gage" dilemma.
     I did graduate in Electrical Engineering. My use of Control
Systems theory and Laplace Transforms is qualified.
     In my last year of engineering, a new and unique university-level
course in the Mathematics of Gambling was offered by my former second
year Engineer Math prof. I had always gambled on campus became known
as "The Engineer" among the crowd and so I excelled at the course and
at the games. I presented my fourth year engineering thesis "A
Computer Analysis of Canadian Stud" to the Las Vegas World Gambling
conference in 1976 detailing my breakthroughs in systematizing play.
After graduation, I had also become a professional gambler while
spending four more years at Carleton University as the Teaching
Assistant of the course doing research on using game-theoretical and
operations research techniques on games of chance.
     In 1979 while running in my first election to Canada's Parliament
to legalize gambling, I had to answer questions on inflation and
unemployment and soon came to realize that what afflicted the the
planet's industrial efficiency was a problem in the token accounting
department perpetrated by banking system computers under a "Mort-Gage
Death-Gamble" software.
     Having specialized in computers through electrical engineering
and the Mathematics of Gambling, I felt uniquely qualified to try to
update the computerized Deadly Gamble software to a Friendly Gamble
software that would perform computerized casino chip accounting.
Deeming it was a rather unique engineering mission I was embarking on,
I continued to call myself "The Engineer." Since then, I've run in a
world-record 37 federal, provincial, and municipal elections based on
the same slogan "Abolish Interest Rates" and use interest-free casino
accounting software.

To spread the message I have had to use tactics unheard,
And it has left me much besmirched. My person, not my word.
Some engineers have said that the profession I disgrace.
In answer for my tactics do I point out this one case.
Destruction of the Challenger, the shuttle's sorry tale,
With engineers who knew the cold would make the rubber fail.
They argued into coldest night, the problem was not cured,
The crew was launched up anyway, for they were all insured.

If you had lots of money and were one such engineer,
Would you imperil, by objecting, your future career?
Most would have told the astronauts their craft was not too stable.
They would have tried to intervene if they thought they were able.
If no one listened to your warning, would you go ahead,
And write up on a picket sign the words you wished be said?
"The weather's been too cold today, the rubber seals won't hold,
If you go up, there's no excuse, you'll die and you've been told."

Most would have carried picket signs and told all who would hear,
Most would have acted in this case of life and death so clear.
If no one listened to you would you tell them what you are,
And write on cap "The Engineer" who's studied this by far?
"The rubber seals are too unsafe, it's death to him who goes,
Believe me please, I've studied seals, the engineer who knows."
Most would have worn the cap that said this is `The engineer,'
Most people to the engineering ethics would adhere.

The shuttle engineers did fail to stop calamity,
They never should have ceded what was their authority.
And if we wished to fix the flaw, would the banks resist?
And would they try to thwart those of us wishing to exist?
The software is the problem while the hardware's good as new,
Inflation can be fixed at will by making debt be true.
The correspondence, one to one, of trades of energy,
It is the right solution. It's the only one I see.

I wore the cap and carried signs to spread my message sure,
Abolish interest to fund environmental cure.
We have the men, materials, technology to win,
To let the bankers slow repair is engineering sin.
I picketed the banks at cities all across the land,
I picketed our Parliament, the weather to withstand.
I picketed the meetings of World Bank and I.M.F.,
The Queen, the Pope, and politicians. They were all so deaf.

The words up on my picket sign were large and made it clear,
"Abolish interest and make the problems disappear."
So I instilled into their minds some words they never knew,
I'm proud to think the Word is sowed in more than only few.

     And that's what people who are setting up their own local LETS
Greendollar barter currencies are finding all over the world. Security
is having lines of exchange available independent of the federal
medium of exchange.
     My original posts failed to include more information on the LETS
because I was quite embroiled in my recent municipal election. I'm
going to post just a few of the best news reports I've found over the
years in the next few topics and consider how how computerized casino
chip accounting is helping those nations get out of the debt trap.

John C. Turmel, B. Eng.

               TURMEL'S GOODBYE TO SCI.ECON FOR AWHILE

     I'd like to answer all the letters and postings I've recently
received by I might have a date with the jailer on Monday morning and
since I'm handling my appeal myself, it has to written before my
sentencing. So I'd better say good-bye for awhile.

     For those who saw the benefits of Local Employment and messaged
your support, I hope I've made things interesting. Now it's your turn
to try to explain the benefits of LETS to those who didn't get it when
I tried.

     I'd like post just one message I received:
     From: bb042@freenet.carleton.ca (Thomas G. McVeigh) pro-LETS
>    I just read your post in the auction discussion group and,
>believe it or not, I had been thinking that would be a great project
>to start on Freenet for a while.  In High School I did an essay on
>this and have been interested in Local Employment Trading Systems for
>a long time. In the spirit of doing it yourself perhaps we could get
>together and design the system and start it.

     I have always said that kids understand interest-free credit
quicker than adults. This young man grasped the software while in High
School and sees the value of offering it on the Ottawa Freenet. It may
have something to do with the fact they looked at whether it was
correct rather than the way I was saying it was correct. The others
aren't interested if it's correct or not and don't mind going out on a
limb with the easily-challenged opinions.

     I'll bet one sharp youngster will make hamburger out of the herd
of dull oldsters. (Technologically, not chronologically) Though I may
not be here to defend myself -- there's nothing much one can do to
defend against name-calling but to point out inability to stay with
the topic - I would take leave on the note that the claims of the
LETSystem integrity remain unchallenged. When they couldn't attack the
program, they attacked the designer. These people are proud that they
don't get it and don't mind telling the world. But I challenge all
boo-birds to try to get the "Pro-LETS Kid" to understand why it can't
work here like it's working all over the world. I doubt that anyone
will. Don't they look foolish having their questions answered by a kid
who learned it in high school.

     So even though "That Turmel" might be gone, I don't think anybody
will be able to successfully denigrate the software if someone else is
explaining it. Without my notoriety to take away from the issue, they
have no reason to insult anyone else. I bet they leave the arena of
debate rather quickly.

GREENDOLLARS CASINO CHIPS WITH QUICKEN OR ACCPACC

     And all because they just can't believe it can be as simply done
as with casino chips. Computerized casino chips. Are there really that
few readers who see how the LETSystem is nothing but a casino chips
system? You pledge your time, your collateral, to get chips. You owe
the chips, but there is no interest. You borrow enough interest-free
chips to pay the banker his service charge. People wouldn't believe it
could work with casino chips so I tried offering them computer casino
chips. And that's what Greendollars are really giving the voters
today, computer casino chips. Interest-free. Why represent our
collateral with their chips for a fee when we can represent our
collateral with our chips free free?
     Because LETS really is simply a "Quicken" or an "AccPacc" package
with a Noticeboard database of goods and services which provides an
accounting method for trades between accounts in convenient units of
time (GreenHours) but without the positive feedback of interest growth
on the debt side of the debt-credit ledger. Using Quicken or AccPacc
with no interest does not cause an inflationary imbalance like the
present dollar software.

DO LETS YOURSELVES ON FREENET:

     The problem with LETS is getting the database of goods and
services offered or wanted to the members using a paper post medium of
information. I don't want to be slowed down like that in Ottawa. So
I'd suggest anyone by-pass the paper noticeboard to the paper-less
one.

     You can use your BBS to store and transfer that information.!!!
So you don't have to wait for the government to do it for you. Instead
of using paper and telephones to register the transactions of your
wants and services, with computer "GreenHours" -- or Greendollars if
preferred -- it can all be done on Freenet.

     All you need is a structured format which allows us to strip
unwanted information and import the rest into our own Noticeboard
database and Green credit account. If a whole lot of Ottawa unemployed
all sent this structured information to one conference, we could read
it all and manipulate that information to find what we want. A user-
friendly front end might someday be provided by the Hackers of the
Freenet. But even if we have to search for the info ourselves, at
least the uniform structure allows us to call the info into our own
database or spreadsheet programs. All we have to do is structure our
messages and both notices and transactions can be sorted by anyone at
home.

     Though you don't have to actually start the system, you can get
ready by finding out what Freenet members have to offer in a sortable
way. At least we should prepare for when things get bad enough and
Barter of Time looks good.

     I'm inviting anyone on the Ottawa Freenet with marketable skills
to do trades with other members, time for time, and we'll call it in
Greenhours. Time dollars are working fine in the States and swapping
money is really swapping time anyway. I recommend an Hour of time is
worth $10 Canadian per hour. But if you charge $20 per hour, charge 2
Hours per hour. Greendollars vs Greenhours. I leave the choice to the
first few who try it out in my absence.

START A NOTICEBOARD OF GOODS AND SERVICES

    Here's how you might use Freenet to barter Greendollar Local
Employment. The Noticeboard of your and others' goods and services
could be a topic there. Public registration of trades in Greendollars
could be another topic of use.

     It is as simple as anyone posting what you want and what you're
offering in a standardized format. Today, there were over 1200 records
of information which could not easily be sorted for easier shopping. A
standard form with categories is crucial to easy manipulation and
shopping. We could search the Category field for the right product and
sort the postal code field for the right neighborhood.

     Just to test it, register what you want or offer. Find out what
others can do for you and what you can do for them. If the deals are
satisfactory to both, register the trades by transferring the
Greendollars back and forth from your accounts. You'll already have an
acceptable Noticeboard if you decided to start counting and working
for real.

     Setting up the Noticeboard should be a pleasant surprise. Lots of
unemployed people have lots of things to offer. Not only could you
post what you want to do but you could also get friends' and
neighbours' names on the list the whole group is looking at. Advertize
what you want to do in a structured way, on a Noticeboard.

     Set up your Greendollar Local Employment accounting system on
Freenet for at least your friends and neighbours. Find someone who is
unemployed but who has useful skills and get them registered on the
Noticeboard of Goods and Services. Unemployed teachers could offer to
teach the unemployed who don't have such skills.

     So before they open the SIG, I'd like suggestions on the number
of fields of information.

     Topic 1 could be the rules of accurate info posting with the
standardized format:

     Topic 2 could be Registration. Jump to Topic 2 and follow-up with
new postings. You can erase any old offers as you want to change the
information. I'd like the information in the following fields simply
for simple sorting. Omit any info you'd rather be kept private. I'd
suggest a 20 line article like:

CATEGORY: The category of goods or services
OFFER: (type) WANTED (or) OFFERED
INTERNET-NAME: (the part before the @)
INTERNET-ADDRESS: (the part after the @)
STORE-NAME: (If possible)
LOCATION: (Plaza, Mall or Area name if possible eg: Bayshore)
UNIT: (Unit or apartment number)
NUMBER: (Street Number)
STREET:
MUNICIPALITY: (City, town, or village)
PROV: (Province 2 letter code)
PCODE: (Postal Code no hyphen)
NATION: (Country in case they're interested overseas)
TELH: (Home telephone number, areacode+number no hyphens)
TELO: (Office phone number, areacode+number no hyphens)
TELF: (Fax telephone number, areacode+number no hyphens)
INFO1: (List skills or info)
INFO2: (List skills or info)
INFO3: (List skills or info)
INFO4: (List skills or info)

     Or perhaps the ott.forsale or ott.jobs Newsgroups could be used
to make offers. Try posting offers for sale for someone's time and
take his public promise to pay in GreenHours. Precede your Titles with
"LETS". Extend and accept public credit. Now others will have an
incentive to trade GreenHours too. The more of your stuff you sell for
public acknowledgments of work owed, the more others will sell for
those public points of work in the system, the larger becomes your
selection of purchases.

     So without incurring any risk at all, you could build up a
database of Goods and Services without even starting trading just to
see what's available out there. If you are linked, you can help get
your un-linked friends some work. Get them a Freenet account and then
post what they want to do in the Noticeboard conference or topic for
them. They might find themselves trading useful work with other
members sooner than they think. Post under as many categories as you
want. It's easier to sort the categories.

POST TRANSACTIONS
     Another conference or topic could be used to register your
trades. Only you the purchaser may authorize that Hours be taken from
your account. Your ID has already been checked by Freenet Security. So
all you need do is post the ID of the person you're paying, the number
of Hours transferred and info of what they did for you.

    I'd start everyone with a H100 GreenHour credit line. That's a
promise that you can deliver 100 GreenHours of work or $1,000 before
or as soon as you leave the system. And owing 100 Hours isn't worth
chasing anyone for.

     If you owe me 10 Hours of time, you might send a three-line
article of information such as:

VENDOR: johnturmel@yahoo.com  (perhaps bc726 to start)
AMOUNT: 10
VALUE: "Turmel wrote a ten-line poem about my ..........."

PAPER TRANSACTION NOTES

     Finally, to reduce data input, and this is an extra option, you
could easily create your own handy paper notes for smaller
transactions in the following way:

     Take any cheques with your printed personal information and make
10 of them out for $5 each. Put a big G in front of the $ sign for G$.
Put the word "Green" before "dollars." Add serial numbers and add your
Freenet ID at the bottom of the cheques. Make out ten G$10 Greendollar
cheques in the same way. These cheques are not for deposit. But when
you create them, you'll have to register them in a conference or topic
that you've created a loan with the proper serial numbers.

     You can pass those notes among yourselves until they start to get
old. If you come into one that needs destruction, e-mail the issuer
and he can transfer the value from his account to yours. You then
destroy the note. If you don't and someone else later presents it to
him, he'll know who didn't destroy his note and we'll take it out of
your account and put back into his. If you're worried about some guys
who might issue duplicate notes or guys who'll counterfeit someone
else's cheque notes, we can always call the police. The use of notes
allows non-members to participate in work simply by accepting them,
like Canadian Tire money, only these are backed up by the Freenet LETS
Noticeboard.

     In the case of a few who want to repudiate their debt in public,
we may subtract a pro-rated share of the lost hours among the whole
database. With Freenet's 30,000 registered members, that 100 hours,
those 6,000 minutes, those 360,000 seconds lost would cost each of us
12 seconds. It's a way to also help someone hit by a fire to rebuild.
So why not try building a Noticeboard of Goods and Services just in
case you someday need it?

     Hoping those economists who didn't take my inflammatory
criticisms to hard accept my true belief that once currency has been
stabilized, all the management skills you learned will allow you to be
as sure of your computations as are engineers. But as long as you
count your wealth in interest-bearing chips, you will never have a
successful economist.

Respectfully yours,
John C. Turmel, B. Eng.

P.S.

     To those who took to flame, watch out. The kids going to come at
you with the software in their hands and you'll have to explain what
you don't see that they do.

Send a comment to John Turmel