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Dear Monetary Reform members,
Bill Ryan's thinking
has some peculiar semantics. He says that the problem is not the
structure of the present system but rather the philosophy of those in
charge. Be it structure or 'philosophy', there is a problem because
the essential truth of the banking system (that it creates money) is always
being obscured.
Now the Governor of the Bank of
England has in effect admitted the truth but he did so in a way which tried to
obscure it. He said that the banking system appeared to create money in
the sense that individual banks receiving deposits can on-lend and that lending
can end up as deposts elsewhere, and then went on to say that the process cannot
continue indefinitely because of capital minimums and interest rates. In
other words, by linking his admission with the statement that the process cannot
continue indefinitely, he was trying to hide the fact that in essence the money
is created out of nothing right the way round the banking system, although the
process is not unlimited.
So Sir Edward's words are a
grudging admission of the truth -- that the banking system creates money.
And repeating those words does not make me a toadie, thankyou, but rather one
who fights to get out the truth about the banking system and who succeeded in
eliciting it from Sir Edward.. When a Governor is forced to admit the
truth, no matter how obscurely, the situation has improved.
I am very pleased that Bill Ryan
has on his shelf a 1827 book saying that the banking system creates money
because, once again, we are in a situation of Bill's peculiar semantics (or, put
differently, his contradictions) with him saying (in a previous email)
that it is factually incorrect to say that loans are created from nothing.
The statement "the banking system creates money" means "creates out of
nothing."
Incidentally, William Patterson,
in 1694, essentially admitted that the Bank of England would be creating
money out of nothing because he arranged it that the Bank would have the benefit
of interest on all monies it created out of nothing.
Rodney Shakespeare.
PS Peter Challen and I are only too willing
to continue our correspondence with the Governor but we pinned him with two
simple matters -- the advantages of using state-issued interest-free money for
public capital spending and for wide-ownership private capital spending -- and,
would you believe it? he is refusing to reply, despite our
reminders.
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