danparker5
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RE: Dan, i will concede that 1730 may not be as contemporary as we would hope but it is the earliest reference in English online and when it comes to other web sources, there is a serious lack of historical references and a reliance upon hearsay and assertion, (among them being the dubious out-of-context or even made-up quotations.} Your own inability to cite a similar source seems to suggest that there is an absence of such evidence to support your claims. As before, relying on contemporary accounts, one might as well say our condemnation of the Catholic inquistion is wrong, because contemporary accounts said it was justified. Again, there is more reason for the powers that be to lie during the time of the transgression; and this information is more, not less, likely to be false. For a pamphlet where the goldsmiths are alleged to have 'lent the king money that was not their own', one could look at The Mystery of the New-Fashioned Goldsmiths (1676). There are three or four other works around this time not hard to find on the Internet. Could be just more propaganda of the time against the goldsmiths.However, I prefer to look at concrete evidence such as the the money supply increasing faster than the increase of gold found in the new world, how bank runs where the bank ran out of gold could not possibly occur it there was no fractional reserve etc.etc. etc. Even human nature, where you know some goldsmiths are going to try this, unless for some incomprehesible reason only saints could become goldsmiths. I have read 'scholarly' works defending the goldsmiths, that maybe they were involved, but most as unwilling accomplices. Funny stuff, but anyways, time to look to the future and not the past, so I'm done here thanks.Dan
Last point on contempary account of gold smith receipts; I realize the Bank of England was founded 1694 (some interesting stuff here) so that it is not really contempory of the main practice, but would be equally needed to defend the Bank of England following a similar course. Incidentially, economists from Irving Fisher to Milton Friedman have advocated 100 percent reserve banking, but it's not a solution in my opinion.
RE: Dan, there's a long running thread on this question, where we record all the incoming evidence against the "thin air" school of banking: I glanced through it, and found the quote by the Icelandic fisherman to hold a deeper truth. Although banks can create money out of thin air, currently subject to a small capital adequacy requirement by the BIS (easily circumvented in many cases), it is true the work by us, or by the robots, the sun etc. is all that can give money its value. A central tenet of social credit by the way, regarding where the wealth of communities really comes from. Money is just a symbol and is only as good as it reflects real wealth production.Good on Iceland BTW, in rejecting austerity, jailing some bankers, and now having higher growth, as wonky as GDP measurement system is, than most of the developed world last year. Could be the bankers are biding their time in making an example of this country in refusing to go along with their fraudulent money creation.Anyways thanks for the discussion, and we will have to agree to disagree on banker limitations on creating money, and where the significant increases in the money supply come from. Dan
Re: Research by one of our members has traced back the earliest reference to goldsmiths and banking in Richard Cantillon's "Essai sur la nature du Commerce en General" *written in 1730*….Maybe, Dan, you possess /primary sources/ of the time that may well give differing descriptions of the process and it would be very much appreciated if you could cite them. If one looks back over bad behaviour in history, one will find far more false information justifying that behaviour in contemporary accounts, rather than latter accounts, simply because there are no powerful interests preeminent to protect with the propaganda. One might as well say that the offical accounts of the Catholic inquistion, while that tragedy was underway, were more accurate than contemporary ones, or for that matter the extent of child abuse in the church was more accurately reflected 30 years ago, than today.One must look at other evidence such as a dramatic increase in the money supply, with no accompanying dramatic increase in gold; for money that was all obstensibly tied to gold. Or how once gold owners caught wind of the scheme, they demanded a share of the interest; and how early bank runs and collapses were only possible because there was not enough gold in the vaults to redeem all the receipts.As for studying the website, my main argument was not with the website per se, but with the false information regarding how money is created, with the derogatory 'crank' designation that so precisely echoes the false propanganda of the establishment. At least until fairly recent, where once again truth is emerging from the propaganda of those and their agents who benefited from the unjust actions. The contemporary accounts at the height of the fraud as it were.RegardsDan Parker
The Socialist Party position strikes a different stance, Dan. We say theproblem before society today is not a financial problem. It is a propertyproblem.This is exactly the view of Our Global Justicemovent, it is a property problem, but more specifically a proper of the concentrated ownership of property .In a nutshell, instead of a relatively few financial houses creating new money from nothing by loaning it to their bigshot friends, we are working on having this new money instead loaned, interest free, to each and every person of majority age for the purchase of productive property. The loan is paid back through the profits, then the investment becomes another source of income, with robots doing the labour. If no profits, there are reinsurance fallbacks as well as a negative income tax for someone whose investments and labour all fail below a point for a basic standard of living. This is better than the social credit design in which credit or money was to be largely distributed by a small group of experts, with inevitable abuses that such concentrated power begets. The power is diffused by the direct ownership of productive property by the vast majority in our work.If you look on our website homepage, middle video, that is what the t-shirts worn by Economist/Lawyer Norm Kurland, and erstwhile civil rights leader Walter Fauntroy, who is standing behind Norm are all about. Own or be Owned. If the big capitalists own almost everything, they own you, the same as what happens when the state owns almost everything. It is a step beyond what Douglas proposed in his book Economic Democracy.The current banks and the big capitalists are really two arms of the same entity, often serving on interlocking boards, and the fact that they get the great majority of the new money is part of this. So a small timer loses his home through the subprime debacle, while Trump gets in serious trouble during the 1980s and the banks make all kinds of concessions to keep him in business. It wasn't even a case of the 'too big to fail' nonsense. http://globaljusticemovement.org/cesj.org is our founder organizationDan
The reasons that banks can create money from nothing and still go broke, is that individual banks have limitations put on them. the banking industry as a whole does not, to date. The latest iteration of controls for individual banks I think was the early nineties 'capital adeqacy requirement' enacted by the BIS, which is the bank for central banks in the west and elsewhere, out of Basel Switzerland.Before the BIS there were other overarching control mechanisms. For example, during the Great Depression, the banks decreased the money supply (money is extinquished when loans are paid off, and if new loans fall substantially, the money system shrinks). As soon as WWII started, the controlling institutions like the Fed B of E etc, lifted the restrictions, now Mom and Dad could both work, to build things to blow up in the fight against fascism. It was an abradcadra money moment, we have high unemployment because not enough money in beginning 1939, then it's Dad's hired, and Mom too in September and onward 1939, because there is lots of money to pay them. Think about it.The distinctions between credit and currency disappeared with the acceptance of the first receipts issued by the gold smiths by third parties, often made out on non-existent gold, the start of fractional reserve.Anyways, I have been studing money creation for thirty years, and as late as ten years ago, I would be the odd kook or crank, or in a small minority in mainstream newsgroups in a discussion on how money is created by banks. Now the majority has been brought up to speed, and even the mainstream Guardian is coming onside, albeit in an article by an author who is just at the beginning of their research and it shows.As for doing away with banks, I think properly structured they continue to offer many useful services. If the idea that government should run everything, history has shown where that concentration of power always leads. Even if the small group controlling does not get corrupted by power (Action said tends to, not will happen), they make an easy target for those less scrupulous. And so Stalin takes over and Trotsky gets the icepick.http://globaljusticemovement.org/index.php/just-third-way/quick-comparisonRegardsDan Parker
I should point out, that the Guardian is a bit above the worst of the mainstream media; but nevermind any mainstream media, the truth about bank money creation can found coming from unpublicized admissions by many leading economists i.e. Friedman saying the money supply was decreased by 30% during the Great Depression, Allais comparing banks to counterfeiters, Galbraith and his comment that the way money is created is repellent, to paraphrase, publications such as that by the Chicago Fed Modern Money Mechanics, common sense on the math, etc. etc. etc.
Re: Nor can banks "create credit"; they are essentially only financial intermediaries, borrowing money at one rate of interest from people with cash to spare and lending this at a higher rate to those needing money to spend or invest, their profits coming from the difference between the two interest rates. Along with the 'monetary cranks' designation, the above statement seems an echo of that the oppressors make, or at least previously made.Unfortunately for the writer, in obeisance to the overwhelming evidence that banks do indeed create money, institutions such as The Bank of England have been forced to admit the obvious truth.This truth starts at the point where all establishment financial institutions chart a tremendous rise in the amount of money in circulation. Did aliens bring it to earth. And no, when you say you make money at your wage slavery, there is no actual new money magically appearing. Place all your money in an envelope and give it to the security guys, then go check the envelopes after work and see if anybody has more in their envelope than when they began work. Silly yes, but not as silly as believing banks do not create money.One of the many, many pieces of said evidence, from the mainstream mediahttps://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerityRegardsDan Parkerglobaljusticemovement.org
