Ian Woods, Editor,
Monetary Reform Quarterly Newsmagazine
RR2 Shanty Bay, ON, L0L 2L0
Tel/fax: 705-726-7300/6500
Email: editor@monetary-reform.on.ca
www.monetary-reform.on.ca
1997 05 04
Dear Sir:
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sci.econ, sci.engr,
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Monetary Reform Quarterly Newsmagazine
Issue 3
Editorial:
"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
again."
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
government."
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.
THE COMING WORLDWIDE MONETARY REVOLUTION
WEB SITES
Canada:
Borrowers Action Society:
http://tgx.com/borrowers_action
Canadian Centre for Policy Alternatives:
http://www.policyalternatives.ca/ccpat.html
Canadian National Debt Clock
http://www.cam.org/~mdavies/cgi-bin/canclock.cgi
Democracy Watch
http://www.web.net/dwatch/camp/banbkdir.html
Fax the Feds
http://www.net-efx.com/faxfeds
USA
American Monetary Institute
http://www.insightcomputer.com/ami/
Coalition to Reform Money
http://www.wavefront.com/~moneytalkscrm
Humane World Community, Inc.
http://landru-i-link-2.net/~monques
Truth in Money
http://www.truthinmoney.com/index.html
Australia
Economic Reform Australia
http://dove.mtx.net.au/~hermann
United Kingdom
*History of Money
http://www.ex.ac.uk/~Rdavies
*Ossian Publishers
http://www.almac.co.uk/diversity/ossian
Austria
University at Linz
http://comlink.apc.org/lav
JCT: A bunch of
these are already on most large web sites with
many links to all the LETS and monetary
reform web sites.
http://barter.xavier.com/community 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
either."
JCT: I think I've
always said the same thing but a little
shorter:
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 alt.fan.john-turmel 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.