Extrapolating A+B Part 1

Extrapolating A+B Part 1:

"...when credit institutions create money through a loan, they do not
create the money necessary to repay the interest on that loan."
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This was by Chris Cook recently in Asia Times Online
http://www.geocities.com/w_b_ryan/cook-05-27-05.txt . I am copying
this reply to him and invite him to join our discussions.

It is what I term the simplistic alternative to A+B. We've seen it
from no less than Alan Armstrong, member and former chairman of the
Social Credit Secretariat.

It is probably held by the majority of the subscribers to this list.

We look at the economic situation from the statistical perspective of
the economy as a whole, or *macroeconomically.* We look at the
behavior of banks in the aggregate; firms in the aggregate; and
consumers (households) in the aggregate as they concatenate through
time.

Looking down on the economy from that perspective, we see a continuous
flux of money from banks into the economy at large. We see a
simultaneous reflux back to the banks.

The flux from the banks consists of loan principal, ordinary business
disbursements plus dividends to bank stockholders.

The simultaneous reflux back to the banks consists of the repayment of
loan principal plus interest and other fees.

Question:

For what logical reason should the banks' ordinary business
disbursements plus dividends NOT equal the payment of interest and
other fees to the banks?
-

.

Relevant Pages

  • TURMEL: Ben Franklin, Prof. Flaherty, on Death gamble
    ... adequate money in circulation for the needs of the economy. ... pay, to anyone. ... In 1913, other plates were given to the banks, ... would then have enough money to pay the rest of the loan. ...
    (sci.econ)
  • Re: Britain does it better
    ... As debts default, money ... This is precisely HOW and WHY the economy here ... The fuckin central banks gave us this monetary system that ... market that will clear. ...
    (rec.martial-arts)
  • Re: How Bad It It Outthere?
    ... anybody who qualifies for a loan doesn't want to borrow. ... forfeiting their earnest money and closing costs. ... The construction industry was one of the better paying blue collar sectors of the economy until that influx of illegals started undercutting the union outfits..they really did a lot to ruin the lives of average working Americans by taking away good paying jobs with benefits and converting them to underpaid positions with no benefits. ...
    (rec.equestrian)
  • Re: Lets understand how money is created ... and how the Fed works
    ... again the Fed does not buy bonds from the Treasury. ... the government or the public has new money created by the ... Bills bought froim selected "dealer" banks. ... The loans would be secured by the bank's assets, its loan receivables, ...
    (sci.econ)
  • Re: Self-Fulfilling Prophecy
    ... I got nervous about the economy last year and moved all my 401K money ... It's not just big investors whose ... If we let the huge banks and the giant corporations like AIG and GM ...
    (rec.motorcycles)