From: (John Turmel)
Subject: TURMEL: Monetary Reform Quarterly Newsmagazine critique
Date: Tue May  6 05:41:08 1997

Ian Woods, Editor,
Monetary Reform Quarterly Newsmagazine
RR2 Shanty Bay, ON, L0L 2L0
Tel/fax: 705-726-7300/6500
1997 05 04

Dear Sir:

     I'm cross-posting interesting information from your magazine with
my commentary to the following Usenet newsgroups: can.politics,,,, sci.econ, sci.engr, and the econ-lets listserv where you can
subscribe by sending:
subcribe econ-lets <your name>

Monetary Reform Quarterly Newsmagazine Issue 3
"Why should a nation give that right away to a private monopoly of
banks and then borrow that same money back with interest which the
nation could have created itself in the first place?
     JCT: I think that describes our predicament perfectly. I have
over a dozen of Noam Chomsky's books which, though great at detailing
the workings of the world's enslavement by government devices, have
never exhibited any understanding of the money problem. He actually
believes that there was a cold war between Russia and the US without
having noticed that it was the bankers who held both their debts who
were calling the shots.
     I found the letter from Prof John Hermann, Economic Reform
Australia, which detailed the impossibility of billionaires conspiring
to use the money system for their own benefit less than enlightening.
Even Chomsky details how Big Money gets governments to do its dirty
work. I guess he thinks the world's predicament is all accidental. The
fact others don't may be his problem, not theirs.
     I was pleased to read the letter from Doug McDonald, the Physics
Major, who said:

DM: "I'm not sure who is responsible for the original design of the
British systgem of money and banking but I'[ll bet there weren't many
mathematicians, scientists and engineers. We wouldn't want accountants
and economists to design a rocket to the moon and I don't think we can
rely on therm to construct a workable monetary system that is fair."
     JCT: The interest-free LETS currency software was designed by
engineers which might explain why there is no positive feedback on the
debt. For Mr. McDonald, the Laplace Transform of the current banking
system is 1/(s-i) and the Laplace Transform of LETS is 1/s.
     I'm pleased to note a quote from Prof. John Hotson who was a
guest on my "Money Talks" radio show on CKAN Newmarket in 1992:
"Could anything be more insane than for the human race to die out
because we couldn't afford to save ourselves?"
     Speaking Out by Bob Verdun has some good but some errors:

BV: #1: "the banks were released from the requirement to put a portion
of every deposit as interest-free reserves with the Bank of Canada.
The banks can now loan the same deposited dollars over and over
     JCT: As my Banking Engineering Analysis verifies, Graham Towers,
Governor of the Bank of Canada, said: "The banks, of course, do not
lend out their depositors' funds. Each and every time a bank makes a
loan, new bank credit is created, brand new money." It may look like
the same paper and metal money get deposited and loaned out over and
over again, the real creation process takes place in the computer.

BV#2: "the real reason for the high risk of inflation is lack of
reserve controls. Banks might make so many loans that the demand in
the economy would rise faster than the supply of goods and services."
     JCT: Real inflation is not more money chasing our collateral,
Shift A, it is the same money chasing less collateral after
foreclosure, shift B.

BV#3: "A large percentage of our money should be created by
     JCT: It doesn't matter who creates the money, whether government
Treasury or Banking cartel, as long as they cover their expenses with
service charges and no usury.

BV: #4: "to ensure that the money supply does not exceed the capacity
of the Canadian economy."
     JCT: This is impossible when the money supply is based one-to-one
on the capacity of the Canadian economy.

BV: #5: "if we had a sensible financial system, banks would always be
looking to expand their base of stock-holders. Stockholders money
provides the seed money."
     JCT: Again, this presupposes that this is the way they must come
up with the money they lend out. Considering they create it from
nothing, how having seed money is going to help them create it from
nothing does not follow.
     More  good stuff:

BV: "Instead of borrowing from the Bank of Canada, the government of
Canada now borrows from commercial banks and foreigners. It is scary
to think all this suffering is caused by a few greedy banks."
     JCT: Even in the Bank of Canada interview, the fallacy that banks
lend out their depositors' funds is repeated and left unchallenged:

BOC: "The TD bank would lend it out as soon as they can."
     JCT: Later in the interview, MRM says:

MRM: "Then they're not loaning out to Mr. Smith any other depositor's
money, they're just loaning out $100 which they've created based on
the $100 reserves."
BOC: That's right.
     JCT: This demonstrates clearly the greatest piece of brainwashing
in economic theory, a Big Lie, a clear case of doublethink.
     Double think is the ability to accept two opposite points of view
as both being true at the same time.
     In one breath, they tell us that a loan is depositor's funds. The
next, they admit it is new funds. It can't be both at the same time
but those economists who have been brainwashed the most are most adept
at accepting both these contradictory points of view as true at the
same time.
     To add to the Bank of Canada's confusion:

BOC: When the money creation process takes place, the banks may not
lend out the entire $100. They may lend out, say $95, and create $95
in deposits."
     JCT: Actually, the banks may not lend out the entire $100 or any
part of that $100. They do not lend out $95 and then create $95. They
create $95 and then lend out the newly created $95 without ever
touching the deposit you made to your account. But it ws sure
explained as backwards as possible.
     I'm pleased to find out that MP Mark Assad, Liberal, Gatineau
La Lievre, asked why the Bank of Canada could not fund production like
it funded was in the 1940s. The governor wasn't even aware that we had
funded our war effort simply parroted the old lie that that
governments printing money and borrowing it interest-free is more
inflationary than banks printing the same and loansharking it out to
the government.
     Of course, as long people are fooled into believing inflation is
Shift A when it's really shift B, Mr. Thiessen can get away with these
kinds of engineering lies. And of course, he repeated the depositors'
funds lie again:

THIESSEN: "Chartered banks pay market rates to attract depositors if
they're going to lend."
     JCT:The question always begs why do they need to attract
depositors' funds when it's not the depositors' funds they are going
to lend out?

THIESSEN: There is no magic money multiplier whereby the banks can
somehow create credit and money out of nothing."
     JCT: Of course, banks do create money out of nothing and this is
just another example at how easy it is to trip up economists when even
the Governor of the Bank of Canada can be caught misleading Parliament
umpteen times in the space of a 4-page interview.
     Of course, when it is accepted that usury is the genocide of the
poor by the withdrawal of life-support tickets, then he'll be able to
plead brainwashing and incompetence. Would such incompetents were not
in charge of running the world.
     I appreciate the letter from Dave Gracey to Thiessen:

DG: "I was frankly astonished at your response.
1. You state categorically that banks cannot create money and that
economics textbooks that say otherwise are wrong. As an economic
teacher, I am considerably chastened.
2. If there is no way whereby banks create deposits from cash
reserves, why worry about the Bank of Canada "printing" money? Money
"printed" by the Bank of Canada is a lot cheaper than money created by
chartered banks. Why wouldn't the Bank of Canada loan to the Canadian
Government the amount equivalent to that currently borrowed from
chartered banks.
3. You stated that you don't have a recollection that the bank lent
large quantities of money to the government during the war years. I
hope you will keep your undertaking to "go back and look at history"
because it is a well-documented fact.
     JCT: It's sad when the head of a system should exhibit such
ignorance about the workings of the system he's in charge of. Must
make a perfect central banker though.
     Thank you for the web sites but you only have to start a LETS
search anywhere to link to hundreds if not soon thousands of people
who are discovering that they can run money themselves and realizing
how badly they've been conned all along.

Borrowers Action Society:
Canadian Centre for Policy Alternatives:
Canadian National Debt Clock
Democracy Watch
Fax the Feds

American Monetary Institute
Coalition to Reform Money
Humane World Community, Inc.
Truth in Money

Economic Reform Australia

United Kingdom
*History of Money
*Ossian Publishers

University at Linz

     JCT: A bunch of these are already on most large web sites with
many links to all the LETS and monetary reform web sites. has over 300 links with several to
some above.
     Many monetary reformers do not yet realize that LETS is the
software program they will need when comes the showdown with their
money computers. Where does money come from these days. Only out of a
computer. It's not gold anymore. It is computer credits and paper and
metal are nothing but chips for the Emoney in banks computers.
     Now people have their own computers and they're creating their
own money in exactly the same way the banks computers used to create
it for them in the past. Ahem. Not " create it for them" but "create
it to loanshark to them."
     I like the fact your magazine details the Guernsey Island 1/s
local currency system.
     What I do find untenable is the conclusion that the best bet of
the monetary reform parties is the New Democract Party. The NDP have
never rarely shown any grasp of monetary reform in their 60-year
history and the NDP candidate in Ottawa Centre had no idea the NDP
allegedly support Bank of Canada reform.
     They've always concentrated on splashing money from the rich side
of the pool to the poor side of the pool while Social Crediters and
true monetary reformers have always spoken about fixing the problem in
the pump house. Of course, the NDP may have learned in the last few
years but since they keep talking about stealing it back from the rich
to give to the poor, this indicates they have no idea how getting to
the pump averts the need to confiscate the liquidity of the rich.
     Asking for a readjustment of the proportions of the money supply
created by the Bank of Canada and the Chartered banks is a cop-out. It
says nothing about the interest rate.
     If they understand that there is no reason for the Bank of Canada
to charge the Government of Canada any interest, and if having the
Bank of Canada start creating 20% of the money and letting the banks
create and loanshark out the rest saves us 20% of the interest, and if
having the Bank of Canada use the LETS software to create 50% of the
money while letting the banks loan-shark out the other half saves us
50% of the interest, and if having the Bank of Canada start creating
75% of the money letting the banks loanshark out the other 25% saves
us 75% of the interest, that's still not good enough. I want to save
the whole 100% of the interest and I want loansharking prohibited. If
the private banks are not willing to give up their interest and settle
for a service charge like LETS bankers do, either the Government or
private LETS is going to do that for us. I am involved in engineering
a solution of vast proportions to Global loansharking and cannot
accept any half-vast solutions.
     I'm glad the Canada Action Party leader Paul Hellyer understands
the problem:

PH: "If no one creates any money with which to pay the interest, what
must be done? The Bank of Canada at one time created more than half
the new money to escape the Depression."
     JCT: Certainly a step in the right direction.
     I always enjoy this quote by Thomas Edison. I'm sure that being
at the top of the engineering profession in his day, he must have felt
the same bewilderment at the global insanity of humankind all trying
to pay off 11 when they only borrowed 10 into the game and then accept
foreclosure and death as a consequence of loss in this fixed game:

THE FINAL WORD by Thomas Edison
"Once the currency method is tried in raising money for public
improvements, the country will never go back to the bond method.
Henry Ford and I think it is stupid that for the loan of $30 million
of their own money, the people should be compelled to pay $66 million,
that is what it amounts to, with interest. People who will not turn a
shovel full of dirt nor contribute to a pound of material will collect
more money from the United States than will the people who supply the
material and do the work. That is the terrible thing about interest.
In all our great bond issues, the interest is always greater than the
principal. All our great public works cost more than twice the actual
cost. But here is the point. If our nation can issue a dollar bond, it
can issue a dollar bill. The element that makes the bond good makes
the bill good. The difference between the bond and the bill is that
the bond lets money brokers collect twice the amount of the bond and
an additional 20% whereas the currency, the honest sort provided by
the Constitution, pays nobody but those who contribute directly to the
project in some useful way.
It is absurd to say our country can issue $30 million in bonds and
cannot issue $30 million in currency. Both are promises to pay but one
fattens the usurers and the other helps the people. If currency issued
by the government was no good, then the bonds would be no good

     JCT: I think I've always said the same thing but a little
Why represent our collateral with their chips for a fee? Interest.
When we can represent our collateral with our own chips for almost
free? Small printing charge.
     We have started a petition for National / Global LETS and so far,
one Liberal candidate has already signed! During the last Canadian
Federal by-election, 5 of 13 candidates signed. This election should
up that number considerably.
     So overall, I welcome another monetary reform magazine. It is a
nice production. There will be much of interest in the final stages of
the battle between the USURY Debt Enslavement software and the LETS
Liberation software and you seem poised to cover it.
     I would suggest that you visit and pick up my
recent post on LETS banking systems engineering. You will then be able
to warn other writers that if they post things that do not agree with
the engineering blueprints of the USURY 1/(s-i) or the LETS 1/s
banking systems, they will end up as examples in John "The Banking
Systems Engineer" Turmel's "errors" critiques.

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