1) The Third Way
                  ABOLITIONIST PARTY OF CANADA
                     ANTI-TAX PROTEST FLYER

     I prepared this flyer for distribution at the Saturday Feb. 11,
1995 Anti-Tax protest at the old Ottawa Tech high school.

"CUT DEBT SERVICE, NOT PEOPLE SERVICE"

We are told there are only two ways out of our financial mess:
1) Raise taxes after paying the debt service;
2) Cut social service after paying the debt service.

Never suggested is a third way:
3) Cut the debt service.

The Fraser Institute estimates Canada's total government-incurred debt
at $1.8 trillion. $60,000 per head. To service the debt in 1994, we
were all taxed about $180 billion. $6,000 a year each. $500 a month
each. Our efforts to pay interest dwarf all other of our other
financial enterprises.

If a way can be found to reduce debt service by ONE POINT from 10% to
9%, that's WORTH $18 BILLION. ONE POINT WORTH 18 THOUSAND MILLION with
which to use in other ways. With two points, the deficit  is wiped
out. Three points, we have payment on the principal, increased social
services and tax cuts. Four points or more, we'll climb out of
debt very quickly.

The largest drain on our economy must be dealt with first. The
solution is not to keep coming up with ways to pay for it or then make
do without essential services. It is to come up with a way for Canada
to get cheaper money. The Oct. 4, 1993 article by Walter Stewart in
the Toronto Sun explains how cutting debt service has worked before:

     "The way it works today, almost all of our money supply is
created by the banks as interest-bearing debt, with them on the
receiving end.
     We can't solve the deficit crisis thus created by slashing
expenditures or raising taxes, because these measures bring the
economy crashing to a halt.
     The idea is that central governments should take back from the
banks the crucial role of creating money, thus restoring sovereignty
to the state.
     The government should direct the Bank of Canada to issue credit
at low- or no-interest for building capital projects. This is what the
Bank of Canada did during World War II with great success.
     The solution, then, appears to be to substitute low- or no-
interest public funds for high-interest private money.
     Various levels of government could borrow this newly-created
money to retire high-interest loans."

So it can and has been done before. The Bank of Canada may directly
issue new loans for government bonds or private property at very low
or even no interest. Housing presents zero risk if properly insured.
But we all need a direct account at the Bank of Canada if we are to
cut out the money middle-men and cut debt service from the budget. We
can cut spending, lower taxes, have a balanced budget. But only if we
tackle debt service first. The Abolitionist Party  promises that  with
everybody having a direct Bank of Canada account, sovereignty on
government spending will be restored to the State and you'll never
have to deal with a money middle-man again.

To the tune: Glory Glory
To raise the tax or fire workers seems the choice we get,
But never is considered cut to service of the debt.
I'll pay my tax for army and police to handle strife,
I'll pay my tax for doctors, nurses who protect my life.

Cut the service of the interest,
Keep the service that we find is best,
Cut the service of the interest,
Or we will lose it all.

I'll pay my tax for all engaged repairing road and sewer,
I'll pay my tax for social servants helping out the poor,
I'll even pay my tax for bureaucrats with no regret,
But I object to paying tax for interest on debt.

Cut the service of the interest,
Keep the service that we find is best,
Cut the service of the interest,
Or we will lose it all.

The Toronto Sun, Monday October 4, 1993.

"NO INTEREST LOANS MAY SAVE US

1. WATERLOO -- At the risk of introducing a new idea during an
election campaign, two professors at the University of Waterloo want
to revive the Canadian economy by using a scheme that has worked on
Guernsey.
2. The Island, not the cow.
3. The professors are Jack Kersell, who teaches political science, and
Robert Needham, an economist and director of the Canadian Studies
Program at Waterloo.
4. Their idea is that the government should direct the Bank of Canada
to issue credit at low or no interest for building capital projects --
roads, schools, hospitals, bridges, railways, airports.
5. Actually, this is what the Bank of Canada did during World War II
with great success and without causing undue inflation. In addition,
various levels of government could borrow this newly created money to
retire high-interest loans.
6. The result would be a vast improvement in Canada's employment, a
sharp drop in the deficit, and a return to stability and prosperity.
7. At a theoretical level, the proposal has some impressive academic
backers, including William Henry Pope, co-author of the classic
Canadian text "Economics," used in every university in the country,
John Hotson of Toronto, founder of COMER, the Committee on Monetary
and Economic Reform, and economist Allan Schmid of Michigan State.
8. There is even a lobby group, called "Sovereignty" which has
headquarters in Freeport, Ill., and which has drawn up a piece of
legislation to "direct the US Treasury to issue such funds as
interest-free loans to state and local governments."
9. The idea is that central governments should take back from private
banks the crucial role, which they had until recently, of creating
money for the economy, thus restoring sovereignty to the state.
10. The theory has been put into practice on the isle of Guernsey,
since 1816, with, apparently, overwhelming success.
11. I am not sure, given the differences between Canada and a small
island state in the English Channel, whether this lesson means we
ought to copy Guernsey or move there but the "Guernsey Experiment" is
worth a look.
12. In 1816, Guernsey was in a hell of a mess. The seawalls were
crumbling, there was no market-place, roads were muddy and horrible,
and the local government was 19,000 pounds in debt. Revenue came to
about 3,000 pounds annually, 2,400 pounds of which went to pay
interest on debt.
13. Sounds like us except that, unlike us, the Guernsey folks did
something about it.
14. They created and lent to the government 6,000 pounds of interest-
free money, and used it used it to fix up the seawalls. This worked so
well that they went on doing it -- and are still doing it -- to create
an economy with zero unemployment, a high standard of living, low
taxes and very low inflation.
15. Gasoline, for example, costs about one third of what it does in
England, about 120 km away.
16. What worked in Guernsey may not work here, in a much more complex
and more exposed, economy.
17. Canada has long since lost control of its own economic destiny. We
traded it to the U.S. for hamburger and to the Japanese for VCRs, long
ago.
18. Just the same, the idea of looking at debt, and the way debt is
created, is a worthwhile one, if only because it will drive our
bankers crazy.
19. The way it works today, almost all of our money supply is created
by banks as interest-bearing debt, with them on the receiving end.
20. We can't solve the deficit crisis thus created by slashing
expenditures or raising taxes, because these measures bring the
economy to a halt.
21. The solution, then, appears to be to substitute low- or no-
interest public funds for high-interest private money.
22. The approach can hardly be any more misguided than the pointless
lashing around that is all conventional approaches have to offer us
today.
---

2) Third Way 1

     Later, in article #919, andersod@cadvision.com (David
Anderson) wrote:

:In article <bc726@FreeNet.Carleton.CA (John Turmel) writes:

::               "CUT DEBT SERVICE, NOT PEOPLE SERVICE"
::We are told there are only two ways out of our financial mess:
::1) Raise taxes after paying the debt service;
::2) Cut social service after paying the debt service.
::Never suggested is a third way:
::3) Cut the debt service.

:I agree with 3), but your ideas on how to do it are weak to say
:the least. Who is going to loan the Canadian government money at
:0 interest?
     The same guys who create new money and charge interest for
it. If you re-read the piece again, you'll notice Walter
Stewart's article said:
:::     "The way it works today, almost all of our money supply
::: is created by the banks as interest-bearing debt, with them
::: on the receiving end."
     So the private banks get to issue new chips into circulation
and charge interest.

:::     We can't solve the deficit crisis thus created by
::: slashing expenditures or raising taxes, because these
::: measures bring the economy crashing to a halt.
:::     The idea is that central governments should take back
::: from the banks the crucial role of creating money, thus
::: restoring sovereignty to the state.
:::     The government should direct the Bank of Canada to issue
::: credit at low- or no-interest for building capital projects.
::: This is what the Bank of Canada did during World War II with
::: great success.
:::     The solution, then, appears to be to substitute low- or
::: no-interest public funds for high-interest private money.
:::     Various levels of government could borrow this newly-
::: created money to retire high-interest loans."
     And why shouldn't the Bank of Canada create and issue new
chips based on the same collateral that the chartered banks would
create and issue. It's the collateral that's the backing for the
chips.
     Why represent our collateral with their chips for a fee,
When we can represent our collateral with our chips for free?

:It sure isn't going to be me, and I suspect I wouldn't be alone.
     Government should be borrowing from its central bank and not
from people.

:To cut the debt service one needs to cut the debt.
     No. To cut debt service, one needs to cut the interest rate.
Then one can cut debt by having payments go against principal.

:To do that, like any individual, income must be greater than
:expenses, which leads back to 1) and 2). I favor 2).
     If you think you can't cut interest rates, option 3), then
of course your options remain limited to 1)  and 2).

:If the government decides to print the money to pay the debt, it
:would result in hyper inflation and interest rates, unless of
:course your willing to pay $400 for a BIC pen. A massive dollar
:devaluation would occur with interest rates going well past 18%.
:The Canadian dollar will in effect do a trip like the peso.
     How is replacing interest bearing debt with non-interest
bearing debt going to hurt things? Thinking "inflation" will be
caused by any increase in money supply is a knee-jerk reaction.
     It meminds me of Edgie the economist who used to play Poker
with me at the Taj Mahal in Las Vegas. Every time someone came to
the table with a couple of trays of chips, he couldn't help but
scream inflation. Economics trains the mind to disassociate money
from collateral. Poker chips are the best example of interest-
free money system I can propose for your consideration.

:We can dream on about easy fixes to a nasty debt problem, but one
:way or another the governments are going to have to eventually
:cut spending big time.
     And I suggest they cut spending on debt service.

:Raising taxes will just drive out wealth, leave fewer jobs and
:require fewer services from idividuals who >have less money to
:spend. The circle is vicious and we are in it.
     And the only way out is to cut debt service by replacing
high-interest privately-created money by banks with no-interest
publically-created money by the Bank of Canada.

     In article #923, jaustin@bcarh7ef.bnr.ca (John Austin) added
little to the discussion:

:I f*****g give up! A moronic tripe HAT-TRICK!
:John PLEEEZE find somewhere else to take your bizarre behavior.
     You have to wonder where these guys come from. I thought
Stewart's article about the Economics Professors' suggestion was
quite complete. Yet, this guy evinces absolutely no understanding
and doesn't mind the whole world knowing he can't keep up with
the discussion. Let's hope he keeps his nose out of topics he
cope with.

     In article #928, ihodge@bnr.ca (Ian Hodge) adds:
:Think not that you can so easily silence the harbingers of DOOM!
     Actually, I'd rather think of a suggestion for the use of
interest-free money as a harbinger of hope. The hope of getting
out of debt by having all our payments go against the principle.
     It's easily done. Not only is it being now done in Guernsey
but British "tallies" worked interest-free, pre-revolutionary U.S.
"continentals" worked interest-free, Lincoln "Greenbacks" worked
interest-free, Roman "Aes Grave" copper money worked interest-
free and Local Employment Trading System Greendollars work
interest-free.

     There are many Greendollar LETS sites to check:
http://www.u-net.com/gmlets/home.html"
http://www.u-net.com/gmlets/users/tml/tml.html"
http://www.u-net.com/gmlets/directry/home.html
http://titsoc.soc.titech.ac.jp/titsoc/higuchi-lab/icm/index.html Ithaca
http://peg.apc.org/~gmorris
http://inet.nttam.com/HMP/PAPER/136/abst.html

     Greendollar software is available at
ftp://scorpion.cowan.edu.au/pub/mlets

     There are several LETS newsgroups on GreenNet and the other
affiliated APC hosts, Pegasus, IGC, Web, etc in other countries:
lets.oz         Australia
lets.uk         UK
lets.can        Canada
lcs.letsgo      (write-only: contact lcs@mars.ark.com (Michael Linton))
lcs.letsoft     software discussion
lets.women      (moderated: contact kaarenp@peg.apc.org for details)

     You can also join the econ-lets digest by sending the
message:
          subscribe econ-lets  <your name>
to:       mailbase@mailbase.ac.uk

     So, no matter how many people can't seem to understand how
interest-free Poker chip money works, the LETS Greendollar
software is poised to replace the interest-bearing software now
being used by our chartered bank computers.
John "The Engineer" Turmel
---

2) Third Way 2
     hluce@netcom.com (Hudson Luce) wrote:
:bc726@FreeNet.Carleton.CA (John Turmel) writes:
:
::               "CUT DEBT SERVICE, NOT PEOPLE SERVICE"
::We are told there are only two ways out of our financial mess:
::1) Raise taxes after paying the debt service;
::2) Cut social service after paying the debt service.
::Never suggested is a third way:
::3) Cut the debt service.
::
::     "The way it works today, almost all of our money supply is
::created by the banks as interest-bearing debt, with them on the
::receiving end.
::     We can't solve the deficit crisis thus created by slashing
::expenditures or raising taxes, because these measures bring the
::economy crashing to a halt.
::     The idea is that central governments should take back from the
::banks the crucial role of creating money, thus restoring sovereignty
::to the state.
::     The government should direct the Bank of Canada to issue credit
::at low- or no-interest for building capital projects. This is what the
::Bank of Canada did during World War II with great success.
::     The solution, then, appears to be to substitute low- or no-
::public funds for high-interest private money.
::     Various levels of government could borrow this newly-created
::money to retire high-interest loans."

: OK, suppose you loan me $1 million at 10% interest p.a. Suppose I get
: so many of these loans that I can't afford to pay the interest, and I've
: already spent the principal. I offer to do either one of two things:
:
: 1. Go bankrupt and leave you holding the bag, having lost your money
:    entirely, without any sort of effective recourse.
:
: 2. Offer to renegotiate the loan to a lower rate of interest, say 3%.
:    Your income, once $100,000 p.a., is now cut to $30,000 p.a. Will
:    you do this because I am a nice guy and you don't want to see me
:    in difficulty?

     You seem to have missed the whole point. When you borrow
from a Greendollar bank at no interest and a small Greendollar
service charge for the operator's time, all your payments go
against the principal. At $30,000 a year, you will manage to
repay your debt to the system in 30 years. There are no
bankruptcies and only total incompetents can't manage to repay a
loan without interest.

: Let's say that you choose option 2, to lose $70,000 p.a. in income.
: I come back and say, "I'd like to borrow another $2 million, and I'll
: pay you no interest for it. I will pay it back next Tuesday." If other
: people offer you 5% and 6%, will you loan it to me for free?

     Why would other people offer me 5% or 6% when they can
borrow their own currency for free. Remember, Greendollars work
like Wampum beads used by North American Indians. If a horse was
worth 100 hours work and you could print up your own IOU bead
worth 1 horse, why would you borrow someone else's bead?

: When you "substitute" low- or zero-interest loans for loans which pay
: a higher rate of interest, what you do is called "defaulting".

     And when you find one lender who lends you money at 8% with
which you repay your loan at 10%, would you really call that
substitution defaulting?

     az915@FreeNet.Carleton.CA (William G. Royds) also notes:

:  My mortgage holder did exactly that last year. When other
: institutions were offering 6% and my mortgage was 9%, I said to
: them "I would like to re-negotiate, if you don't I will pay the
: penalty and go to someone else". They re-negotiated to a better
: deal than I could get elsewhere. The government should do the
: same because it is much better for a debtholder to have money let
: out at some interest rather than not let out at all. It is the
: same principal as airlines do with standby seats. The problem is
: that the government does not negotiate with the money lenders. It
: allows them to set the cost and is a price taker rather than a
: price setter. In any business, if you are the biggest market, you
: set the price.

     hluce@netcom.com (Hudson Luce) continues:

: Businesses
: which do this often find that their creditors will sue to force them into
: receivership, so that they can seize back collateral to cover their losses.
: They also find it very difficult, if not impossible, to raise more money
: by selling their debt, at *any* offered interest rate.

     Yes, this is what happens in an interest-bearing world. It
doesn't work that way in an interest-free world.

: Governments which try to default on their interest payments quickly find
: that no one wants to buy their treasury obligations (notes, bonds, etc)
: even if they increase the interest rate to 1000% after the attempted
: default. It's a quick way to balance your budget.

     So if no one wants to by a $1,000,000 government bond at 10%
so the government can perform governmental functions, why not
have the government directly pay people with 0% $10 bonds which
could be traded like currency and used by anyone to pay their
taxes. That in effect is all Abraham Lincoln did with his
Greenbacks and pre-revolutionary American states did with their
"Continentals." British kings used wooden tallies in the same
way. Romans used Aes Grave copper money. Guernsey Island uses its
own government created interest-free currency in the same way.
     If someone offered you a $10 US bond you could pay your
taxes with, would you treat it in any less favorable way than
you'd treat a US dollar you can pay your tax with.
     Thomas Edison said:
     "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 also."
     So similarly, if you trust in the dollar bill, the element
that makes the dollar bill good makes the dollar bond good.

: Tell you what... Do you have a mortgage on your house? If so, what
: interest rate do you pay? Is it too high? If so, make an offer to the
: bank to replace your present loan with a non-interest-bearing loan, or
: maybe cut the interest to a more reasonable figure, say 1 or 2%. Do
: you think they'll take the offer? If they don't, if you don't pay the
: interest payment, do you think they'll let you keep your house?

     No I don't. That's why it's going to take government backing
to force them to accept service charges rather than usury.

: Why do you think people will treat Government obligations any
: differently than those owed by individuals and businesses?

     Because they'll be backed up with the very best collateral,
taxation power. As long as we can pay our taxes with those pieces
of paper, everyone will accept them as money. So why bring the
bond to the bankers and let them create the bills and charge
interest when the government can allow the Treasury to create the
bills and borrow them at no interest like British Kings borrowed
their tallies from the British Treasury?

     az915@FreeNet.Carleton.CA (William G. Royds) also notes:
:    If the federal government stopped paying interest, it
: wouldn't have a deficit to need to borrow money. It gets more
: revenue than it pays in program costs. The whole federal deficit
: is due to interest. As a matter of fact it could even
: significantly reduce the debt and become more attractive to money
: lenders.

     Of course, stable money would be attractive but we wouldn't
need the money-lenders anymore.

     It's evident that hluce@netcom.com (Hudson Luce) hasn't
spent much time contemplating The Third Way. The whole article
deals with how an interest-free system would work and his whole
article dealt with the problems of an interest-bearing system.
     For a while, could those who understood how an interest-free
Treasury bank would work handle a few of the queries from others
who don't?
John "The Engineer" Turmel
---

3) Subject: Re: TURMEL: The Third Way
     hawley@ibm.net wrote:

     bc726@FreeNet.Carleton.CA (John Turmel) writes:

::: hluce@netcom.com (Hudson Luce) wrote:
::: OK, suppose you loan me $1 million at 10% interest p.a. Suppose I get
::: so many of these loans that I can't afford to pay the interest, and I've
::: already spent the principal. I offer to do either one of two things:
:::
::: 1. Go bankrupt and leave you holding the bag, having lost your money
:::    entirely, without any sort of effective recourse.
:::
::: 2. Offer to renegotiate the loan to a lower rate of interest, say 3%.
:::    Your income, once $100,000 p.a., is now cut to $30,000 p.a. Will
:::    you do this because I am a nice guy and you don't want to see me
:::    in difficulty?
::
:: You seem to have missed the whole point. When you borrow
:: from a Greendollar bank at no interest and a small Greendollar
:: service charge for the operator's time, all your payments go
:: against the principal. At $30,000 a year, you will manage to
:: repay your debt to the system in 30 years. There are no
:: bankruptcies and only total incompetents can't manage to repay a
:: loan without interest.
:
:YOU are the one missing the point, John; we owe  the  money  now,
:and  if we arbitrarily decide not to repay it as promised we will
:face sure and certain evil consequences.
:
     No, you are missing the point.
     I understand that you owe the money to your usurers now.
     I said that you'd pay the money later to the your new
interest-free banker who loaned you the money so you could pay
off your usurer now.

::: Businesses
::: which do this often find that their creditors will sue to force them into
::: receivership, so that they can seize back collateral to cover their losses.
::: They also find it very difficult, if not impossible, to raise more money
::: by selling their debt, at *any* offered interest rate.
::
:: Yes, this is what happens in an interest-bearing world. It
:: doesn't work that way in an interest-free world.
:
:In an  "interest  free"  world,  nobody  loans  anybody  anything
:because  they  can't  make  money at it.
:
     Again, you missed the point.
     Nobody borrows from anybody else when the central
Greendollar system is willing to do it. You keep forgetting that
there's a central Greendollar computer that does it for everyone.
Ask any member of a Greendollar system where they borrow their
Greendollars.

:We are already suffering from  substantial  depreciation  of
:our  dollar  (and  resultant inflation);
:
     Evidently, you didn't read the Mathematics of Debt Slavery
or the Grade 9 algebra was over your head.
     In a properly functioning casino banking system, there can
be NO INFLATION because the chips are always backed one-to-one
with value.
     Gamblers can only laugh at guys like you who think that
chips inflate.

:these  sorts  of  voodoo  economics  to  make  debts
:disappear are simply not going to work.
:
     Again, you are confused between making debt disappear and
making debt disappear service. Try to stay focused on what I'm
saying, not what you think I'm saying.

:Governments can either tax the citizens  for  money,  borrow  the
:stuff,  or print funny money.
:
     For the record, the creation of money can either be in the
medium of paper, metal or credits in a computer but I'll refer to
all three types of creation of money as "printing."
     Where to you think the guys from whom the government borrows
it get it from? The banks print it. Even if some is obtained from
individuals, it was first created by a bank. They create it right
in their banks' computers. Check any basic Economics textbook for
an explanation of how banks create money by making loans.
     So why should private banks printing money and charging the
government interest be serious and the government printing the
money itself and saving the debt service be funny?
     Of course, "funny money" is what bankers have trained their
economist chimps to scream every time someone suggests that
anyone but their masters be allowed to create the money. You've
simply been duped into laughing at a better money system than
you're capable of comprehending.

:If governments spend more than they
:tax, then we get debts. If they print more money than the economy
:can absorb, then we get hideous inflation  (Brazil  or  Argentina
:offer examples).
:
     And no one's suggesting the casino print more money than the
collateral the economy can produce. You completely fail to grasp
how creation and issuance of chips does not necessarily entail
inflation unless the chips are issued without a collateral base.
     I like to tell the story of Edgie the economist who screamed
"Inflation" every time someone came to our Poker table with a new
tray of chips. It seems to be a Pavlovian response embedded into
an economists' psyche.
     So we solve the problem by promising to let them cash out
first and let the last guys suffer the supposed inflation of the
chips. And yet, no one has ever failed to cash in their chips for
the original value pledged. And no matter how much we laugh at
the economists who scream "inflation" every time they see new
chips being introduced into the game, they just can't help
themselves.
     You're a good example.

:Your "third way" is just gussied-up funny money.
:
     See.

:Cogito, cogito, ergo cogito sum
:
     Doesn't seem to be much "cogito" going on.
John "The Engineer" Turmel
---

4) Third Way 4

:Subject: Re: TURMEL: The Third Way
:From: drasley@nbnet.nb.ca (Lazarus)
:
:On Wed, 21 Jun 1995 05:53:01 GMT,  bc726@FreeNet.Carleton.CA writes:
::
:::We are already suffering from  substantial  depreciation  of
:::our  dollar  (and  resultant inflation);
:::
::     In a properly functioning casino banking system, there can
::be NO INFLATION because the chips are always backed one-to-one
::with value.
:
:Supply and Demand.  You might have a limitless supply of Greendollars/chips,
:but there is a finite supply of goods and services available to be bought.  If
:you only have 10 widgets and more than 10 prospective buyers, price goes up.
:Basic economic principal.  The seller sets the price which the market will
:bear, and a price which rises is *gasp* INFLATION.
:
     If you only have 10 widgets and the cashier only issued 10
chips, have fun bidding all you want. If you want to give the
cashier two chips for one widget, I'm sure he would mind taking
the other widget you could have had home for himself.
     But then again, you forgot how many chips were issued when
the 10 widgets were pledged at the bank, didn't you?

:Or, you are working hard for your Greendollars/chips, yet you feel your work
:is worth more.  You get a raise from your understanding boss, who must raise
:his prices to cover his increased costs, or suffer a decline in his own
:standard of living.  Once again, this sounds characteristically like
:INFLATION.
:
     So the boss now doubles the price for his product at the
cage where he receives two chips for that widget with which to
pay you. Notice that the tokens have matched the price increase.
If people think you worked hard and your product is worth it,
when you spend your two chips with them, they will spend those
two chips at the cage for your more valuable effort. If it
doesn't sell at 2 and only for one, the boss loses some of his
profit.
     Think of this chip money system like at two-part raffle
ticket with the Green part being the currency and the Red part
being the price tag. For every dollar your boss pays you, he
adds that component of price tag to the item.
     There can never be an imbalance between the money and the
prices and if you retain that inflation is a shift between money
and prices usually thought to be caused by an inordinate growth
of money, it's obvious inflation can't exist with a two-part
money-tag system.
     I guess it's an even better example than casino chips. But
chips really work essentially the same way.
John "The Engineer" Turmel
-------------------------------

5) Subject: Re: TURMEL: The Third Way

     hawley@ibm.net (Glenn mor) wrote:
:
:In <DAIDoD.ECD@freenet.carleton.ca>, bc726@FreeNet.Carleton.CA (John Turmel) writes:
:
:: And no one's suggesting the casino print more money than the
:: collateral the economy can produce.
:
:Tsk tsk... you are suggesting exactly that when  you  propose  to
:print  funny  money  to  pay  off  current  bondholders with. The
:amounts (including the interest,  which  we  still  have  to  pay
:because  we  _contracted_ to do so) are far in excess of what the
:economy could possibly absorb without considerable inflation.
:
     I disagree. Canada has undeveloped and developed resources
that could easily act as base for new chips.
     If everyone who had a mortgage on their home or business
pledged it to the Bank of Canada and received in interest loan on
those resources with which to pay off their interest-bearing
debts, again, the total debt wouldn't change by this substitution
of interest-free funds for interest-bearing funds but the debt
service would be eliminated.

:: You completely fail to grasp
:: how creation and issuance of chips does not necessarily entail
:: inflation unless the chips are issued without a collateral base.
:
:Getting  off the rather silly poker chip analogy,
:
     To you the poker chips are an analogy. To an engineer, they
are a model. Engineers use models because it's the most efficient
way to considering the system. That you think it's a silly
analogy when it's a perfect model says a lot of your ability at
considering the system's engineering.

:it remains that
:there  is  no  surplus  "collateral  base"  available   for   the
:government  to draw upon in the creation of all this funny money.
:
     Government has all the resources of the country, the leases
and the tax-collecting ability to draw upon in the creation of
this serious money.
     If converting from interest-bearing debt to interest-free
debt can be done for housing, it can be done for government-owned
assets too.
     Your continual use of the denigrating term "funny money"
may have been been useful in the old days of laughing at the old
Social Crediters but it hardly sounds intelligent in the
discussion of engineering modelling. I can't ever remember
standing around a blue-print or a model and qualify it as
"funny."
     As long as you keep exhibiting a total lack of engineering
skills, call the model funny all you want but I think what's
funny is trying to engage in a technical discussion and failing
at every turn.
     Just remember that many of the more technically intelligent
readers of this thread get to understand how you just can't cut
the mustard and are proud of it.

:"The economy" isn't where the government's collateral comes from,
:unless you mean by that simply the power to tax, and  that's  not
:at all the same as printing new money.
:
     Printing money based on the collateral of the power to tax
is how the Tallies worked, how Greenbacks worked, how Aes Grave
money worked, how Guernsey currency now works so in a sense, it
is.

:Any   attempt  at  magicking  away  our  debt  by  subterfuge  or
:legerdemain will inevitably  rebound  upon  the  government,  and
:ourselves, with disastrous consequences.
:
     I am not magicking away our debt. I'll repeat it one more
time. As those who have followed this stream, haven't I repeated
that the debt stays the same. Once more, the debt stays the same.
Only the debt service is eliminated. What is it that makes that
concept so hard for him to grasp that he keeps insisting that
the debt will disappear.
     I've mentioned this over and over but it just doesn't seem
to have penetrated that dead mass between your two ears
     Of course, it will eventually disappear as all payments go
against the principal but at the start of the process, none of
the debt disappears.
     Of course, to someone who has absolutely no concept of
engineering modelling nor the ability to remember statements in
previous posts, it's a natural but false conclusion.
     The only fortunate thing is that your posts provide much
mirth in my discussions with people who do understand poker chips
or engineering modelling.
John "The Engineer" Turmel
---

6) Subject: Re: TURMEL: The Third Way

     hawley@ibm.net wrote:

:  John Turmel wrote:
:
:: If everyone who had a mortgage on their home or business
:: pledged it to the Bank of Canada and received in interest loan on
:: those resources with which to pay off their interest-bearing
:: debts, again, the total debt wouldn't change by this substitution
:: of interest-free funds for interest-bearing funds but the debt
:: service would be eliminated.
:
:The above doesn't even make sense, John; mortgages are
:liabilities in the books of the home or business owners and are
:not theirs to "pledge" to anybody.
:
     1) Of course they are. Don't you know that everybody who
refinances their homes with a new money-lender does exactly that?
Have you never heard of the concept of "refinancing" and paying
off the original mortgage holder?
:The owners and controllers are
:the persons who loaned them the money. Those persons are going to
:insist on receiving the interest that they contracted to receive,
:the same way any buyer of GIC's or depositor in a bank expects to
:be paid the interest that is their due.
:
     2) And I always suggested that people borrow sufficient to
pay off the whole debt as it stands.

:The "debt service" has been contracted in advance... we have
:guaranteed to bondholders that they would be paid interest in
:return for the money, and we cannot simply abrogate those
:agreements.
:
     3) And I'm not suggesting anyone abrogate their agreement.
If people regularly refinance their homes with cheaper money if
they can find it, why won't they refinance with cheapest money if
they can find it.

:: To you the poker chips are an analogy. To an engineer, they
:: are a model. Engineers use models because it's the most efficient
:: way to considering the system. That you think it's a silly
:: analogy when it's a perfect model says a lot of your ability at
:: considering the system's engineering.
:
:Well,  ignoring  the  gratuitous  insults for the moment, a poker
:game is not a very good model for an economy, John, much  less  a
:"perfect" one.
:
     4) Wrong again. I never said a Poker game was a good model
for the economy. I said a Blackjack game was.
     Actually, I'm kidding. I never said any game was.
     I said that the poker chips are the model for the banking
system and never once mentioned poker as the model for the
economy.

:Models,  to be useful, must have behaviours that
:mimic the phenomena they are supposed to be modelling. The  poker
:chips don't do very well in that regard.
:
     5) Again, for you to think that poker chips model the
economy when in actuality, they model the monetary tokens, is
just another of your continual errors.
     Please don't try to tell an engineer about modelling when
it's evident you have no idea how modelling should work.

     So Glenn is wrong five out of five times. And in ways that
obvious for everyone to see.
     That's what I used to love most about picketing the Bank of
Canada every Thursday on "interest-rate-setting" day. Economists
would come out and argue with me in public and I'd keep pulling
the rug out from under them at every statement, just I have been
doing to Glenn.
     I used to call those who came back for more "gnurds," guys
who were convinced that it couldn't be as easy as poker chips.
Sometimes, we'd have crowds of hundreds gather around as I made
the crowd laugh at their inane arguments and miscomprehensions.
And they'd come up with statements just as ridiculous as Glenn's.
     All who are getting the same laughs out of Glenn's thoughts
here should appreciate the fun of having instantaneous reactions
of laughter from the crowds during our debates. Those were great
years though after a few years, the economists got tired of being
laughed at and stayed away.
     That's why I take the time to correct Glenn here. It's
actually quite fascinating to see how they just can't retain any
of the simple analogies and models offered and don't mind the
whole world knowing.
     This one was a great example. Everybody who has ever held a
mortgage knows about trying to find a cheaper mortgage to pay off
the first one. But Glenn says it can't happen. Is there one
person out there who agrees with Glenn that people can't pay off
their mortgages with new loans from others because:
     "mortgages are liabilities in the books of the home or
business owners and are not theirs to "pledge" to anybody?"
     Is there someone out there who did just that?
     This has got to be one of the more ridiculous objections
I've ever heard but I'm never surprised at the inane reasonings
these guys can come up with. That someone would actually say this
is really funny though. Only an economist.
John "The Engineer" Turmel
---

7) Subject: Re: TURMEL: The Third Way

     hawley@ibm.net wrote

(John Turmel) writes:
:
::: The "debt service" has been contracted in advance... we have
::: guaranteed to bondholders that they would be paid interest in
::: return for the money, and we cannot simply abrogate those
::: agreements.
:::
:: 3) And I'm not suggesting anyone abrogate their agreement.
:
:John,  John,  John...  you've  said  that we should replace these
:contracted debts (some of them long term) with new money  created
:for that purpose, and which does not pay the promised interest. If
:we  do  not  continue  to pay the interest, we have abrogated the
:agreement.
:
     So find anywhere where you think I say that the next loan is
not to be used to be paid the accumulated debt. Don't all people
who refinance their past debts do so on the basis of satisfying
the total former debt. That's what I've always said. As the debts
come due, they are paid off. So why are you saying "which does
not pay the promised interest?"
     Did I not in last post write:

::     2) And I always suggested that people borrow sufficient to
::pay off the whole debt as it stands.

     So where do you get off concluding that I'm suggesting that
people NOT borrow sufficient to pay off the WHOLE debt? Or did
that statement go in one ear and out the other?
 

:: 4) Wrong again. I never said a Poker game was a good model
:: for the economy. I said a Blackjack game was.
:: Actually, I'm kidding. I never said any game was.
:: I said that the poker chips are the model for the banking
:: system and never once mentioned poker as the model for the
:: economy.
:
:Which  fails  to  address  the  central problem, that neither the
:games, nor the chips, nor the  players  successfully  model  even
:banking, much less the rest of the credit economy.
:
     The Engineer says chips do, the non-engineer says they
don't. Chips are of different colors or denominations. What
better model have you got to suggest to model money of different
colors and denominations?

:: Economists
:: would come out and argue with me in public and I'd keep pulling
:: the rug out from under them at every statement, just I have been
:: doing to Glenn.
:
:Ah,  yes. With some kindness, John, it should be pointed out that
:those who feel the need to cry out that they are "winning" a
:discussion are generally not doing very well at it.
:
     Generally? Why don't produce an example?
     Seems to me that people with the nerve to state they're
winning are the guys who have the last word in that discussion.
We haven't heard much more from hluce@netcom.com (Hudson Luce)
since very few losers are willing to stand up and tell the world
they're winning when the world has been listening.
     And I think The Engineer is winning this discussion on what
is a good engineering model and what is not based on the fact
that I've suggested and engineering model and you haven't.
John "The Engineer" Turmel
---

8) Subject: Re: TURMEL: The Third Way

     fche@elastic.org (Frank Ch. Eigler) wrote:

:John Turmel (bc726@FreeNet.Carleton.CA) wrote:
:: That's what I've always said. As the debts come due, they are
:: paid off. [...]

:John, how do you propose to convince non-nationals to accept
:payment by poker chips?

     If the poker chips are accepted through the whole country
and backed up one-to-one with wheat, oil, metals, I think they
would prefer a $1,000 receipt which can purchase the same asset
today and next year rather than a $1,000 bill which can purchase
that asset today buy but less next year after inflation.
     Just because I say that the Canadian money system should be
run on the same algorithm doesn't mean they have to look like
Poker chips. They should look just like Canadian money looks
today in which case, the only difference would be that their
value would be stabilized.

:Also, are you not worried that the interest free one-to-one
:collateral scheme would limit the availability of credit?
:Companies would not be able to borrow money against future
:income (as opposed to backing loans by their existing
:capital).
:
     There's no reason money-chips cannot be loaned against
future income. It's the same as a casino issuing chips based on
collateral offered and based on the borrower's marker. His
promise to pay. So though backing up loans by their existing
capital is a start, so is backing it up with future income.

:The interest system encourages adventurous bankers
:to issue money for such enterprises, at an appropriate level
:of risk and reward to the banker.
:
     But the interest itself creates the risk which is why mort-
gage comes from the French words "mort" and "death."
     If everybody borrows 10 and everybody owes 11, the demand
for the 11th token of money which was never put into circulation
creates an automatic shortage which causes foreclosure of the
losers.
     In my earlier "Mathematics of Debt Slavery" post,
you'll notice the examples of "Interest Island" versus "Service
charge Island":

GAME MODEL: SERVICE CHARGE VS. INTEREST
In his book `The Theory of Games and Economic Behavior', John Von
Neumann, one of this century's top mathematicians, stated that "important
questions in economics arise in a more elementary fashion in the
theory of games." In the business war for markets, the economy decides
who sells their goods and who fails to. Models used by economists are
flawed by guesses and approximations about what the economy will
choose. The only way to perfectly model the economy is to use fair
chance to pick the winners and losers.

TO PLAY MORT-GAGE:
The necessary game equipment for "mort-gage" is 1) a box to represent
the market economy); 2) 3 types of tokens to represent food, shelter,
and energy (the tokens can be mints, napkins, cutlery);  3) a fair
chance mechanism like a coin, cards, dice, straws, etc.; 4) matches or
tokens to represent currency.

In the Interest Game, all owe the bank 11 for every 10 tokens they
borrow and have to inflate their prices to repay both the principal
and the interest.
Step 1) Have all the players wishing to get into business pledge their
watches to borrow 10 matches from the bank at an interest rate.
Step 2) Have all players spend 10 matches into the market box in
exchange for a token representing the product of the economy's labor.
Step 3) Have pairs of players, those with similar tokens first, use
chance to decide which will win a market share out of the box large
enough to pay the principal and the interest necessary to survive the
bank's demand.
Step 4) When the market runs out of currency, let the bank seize the
tokens and watches of the losers.
Step 5) Record the percent of those knocked into unemployment and the
collateral seized.

In the Service Charge Game, all owe 11 for every 11 they borrow with
the 11th paid immediately to the bank employees as a service charge.
Step 1) Have all the players wishing to get into business pledge their
watches to borrow 11 matches from the bank.
Step 2) Have all players spend 11 matches into the market box in exchange
for a product token, 10 for the services of those who produce the
goods like on Interest Island, but also 1 for the services of the bank
employees who facilitated the transactions.
Follow Step 3), 4) and 5) and note that in the Service Charge Game,
unlike in the Interest Game, everybody can sell all their goods
because the 11th unit of money entered the market through the bank
employees. The very subtle difference between systems is that in the
Interest Game, the bank demands payment of money it did not create
while in the Service Charge Game, the bank demands payment of money it
did create. With exactly enough markets to match the prices of goods
produced, there can be no foreclosures.
     I hope this analysis has helped clear up many of the formerly
misrepresented and misunderstood aspects of the usury banking system
as well as explain why usury has been condemned throughout history as
the greatest crime against humanity. It's the only thing standing
between mankind and abundant salvation.
     I hope this simple demonstrattion shows how service charge
loans do not create a death-gamble with a determinable percentage
of losers like usury and where every producer may survive.
John "The Engineer" Turmel
---

9) Subject: Re: TURMEL: The Third Way

     cbbrown@io.org (Christopher B. Browne) wrote:

:In article <DAyp0n.FEH@freenet.carleton.ca>,
:John Turmel <bc726@FreeNet.Carleton.CA> wrote:
::     I hope this simple demonstration shows how service charge
::loans do not create a death-gamble with a determinable percentage
::of losers like usury and where every producer may survive.
:
:Similarly, one can demonstrate that "rent" on any kind of property
:is also a "death gamble,"
:
     Go ahead and demonstrate it.

:indicating that we really ought to
:move back to a completely self-reliant society in which each
:person ekes out a meagre existence cultivating the land passed
:down from their parents.
:
     Why do you say a self-reliant society means people have to
eke out meager existences cultivating the land. Go ahead and
demonstrate.
     My whole point is that a high-tech self-reliant society can
provide abundance for all.

:The problem with the demonstration is that it ignores the
:*time* element.
:
     If you'd read my post "Mathematics of Debt Slavery," you'd
have noticed that I deal in both exponential functions which
deals with the time element and differential equations which also
includes time. I don't know how you could have missed the "time"
variable if you had read the material.
     Besides, all games deal with time since time elapses
between the start and the end of the contest.
     Considering how time is one of the essential elements of my
analysis, this statement is lacking in grasp.

:In order to use the "token" method, we have to have a situation
:where nobody really has a *need* to borrow money, merely a static
:preference for the idea of borrowing money.  Moreover they need
:to not have any preference for *not* lending their money out.

     If you insist we "have to have" something that won't make it
work, then as long as guys like you are involved, it won't work.
This gibberish is not worthy of reply.

:Since both of these tendancies aren't that common in human
:beings, the demonstration really just doesn't work.
:
     We're talking about a system malfunction, not a human
frailty. This is not a competent technical analysis.
     Ask any 12-year old who has ever used Poker chips to explain
it to you. Better yet, try to explain to him why Poker chips
don't work.
John "with-patience-to-suffer-fools" Turmel
---

10) Subject: Re: TURMEL: The Third Way

     fche@elastic.org (Frank Ch. Eigler) wrote:

John Turmel (bc726@FreeNet.Carleton.CA) wrote:
:: [...]
:: :Also, are you not worried that the interest free one-to-one
:: :collateral scheme would limit the availability of credit?
:: :Companies would not be able to borrow money against future
:: :income (as opposed to backing loans by their existing
:: :capital).
:
::      There's no reason money-chips cannot be loaned against
:: future income. It's the same as a casino issuing chips based on
:: collateral offered and based on the borrower's marker. His
:: promise to pay. So though backing up loans by their existing
:: capital is a start, so is backing it up with future income.
:
:But, I thought, backing the poker chips against present physical
:capital was your means of ensuring that their value does not
:decrease.  If I can start borrowing against my future income,
:wouldn't the money supply explode just as with fractional reserve
:banking, or interest-based loans, leading to similar inflation?
:In fact, isn't borrowing money against money equivalent to the
:present system?
:
     Yes, the present system allocates credit on people's
collateral and on their word.
     The present Greendollar systems allocate Greendollar credit
on the basis of only their word.
     Yet, this doesn't cause any inflation because the credit is
backed up one-to-one with a promise to pay which is valued at the
same value as collateral.
     Besides, what do you do with the money you borrowed? Your
debt account went up and your cash account went up. You purchased
things meaning that though your cash account went down and your
asset account went up.
     What do people who have sold you something do with that new
money. Their cash account went up and their asset account went
down. Then they paid their debts incurred for the production and
their cash account went down and their debt account went down.
     The net result is that you owe the system instead of the
person who supplied you with the asset. Quite equitable and with
no eventual change to the money supply so why should there be any
inflationary shift?

:: :The interest system encourages adventurous bankers
:: :to issue money for such enterprises, at an appropriate level
:: :of risk and reward to the banker.
:
::      But the interest itself creates the risk which is why mort-
:: gage comes from the French words "mort" and "death."
::      If everybody borrows 10 and everybody owes 11, the demand
:: for the 11th token of money which was never put into circulation
:: creates an automatic shortage which causes foreclosure of the
:: losers.  [...]
:
:But there is no burden on anyone to ensure that everyone must be
:a winner.  The losers get there because they generally deserve
:to.
:
     I draw a distinction between people becoming losers because
they're lousy producers and people becoming losers due to a fixed
rule of the game.
     10 robots all borrow $100,000 to buy the wherewithall to
produce identical shoes. All 10 robots owe $110,000 and hence
must price their shoes at $110,000. The economy which has
received 10x($100,000) paid by the robots for the production of
the shoes can only but 10x($100,000) out of a total prices of
10x($110,000) leaving $100,000 worth of shoes unsold.
     One of the robots must fail and be foreclosed on and it is
not a case of bad management so that it deserves to be the loser.
One of the robots is foreclosed upon because there was
insufficient money issued into circulation to purchase all the
shoes.
     It is this fixed amount of failure with no regard to good or
bad management that I object to.
     Of course, looking at the good or bad management masks the
fact that there is a ratio of producers pushed into foreclosure
independent of their management.

:Besides, it is never the case that `everybody borrows 10 and
:everybody owes 11' in the present banking system.  The banks,
:being members of the `everybody' set, borrow 11 and owe 10,
:balancing the numbers.
:
     Please. This is a first. Borrowing 11 and owing 10? I've
heard of bankers getting preferential interest rates borrowing
$100 and owing $101 while everyone else would owe $110 but I've
never heard of anyone borrowing 110 and owing 100.
     And even if somehow some bankers could do that, it certainly
wouldn't be anywhere close to the volume of loans that go to the
mass of borrowers in the economy.
     You'd better provide some proof as right now I think it's a
pretty ridiculous statement.

:: [...]
:: GAME MODEL: SERVICE CHARGE VS. INTEREST
:: [...] The only way to perfectly model the economy is to use fair
:: chance to pick the winners and losers.
:
:Are you saying that the market is completely random?  What of
:competitive
:
     No, but I'm saying that to fairly model the economy, it is
better to use a fair gamble, model the test thousands of times
and use statistical analysis to derive the general result than to
guess at variables in an econometric model.
     Why, are you saying Von Neumann was wrong when he said that
"important question in economics arise in a more elementary
fashion in the theory of games?"
John "The Engineer" Turmel
---

11) Subject: Re: TURMEL: The Third Way

     fche@elastic.org (Frank Ch. Eigler) wrote:

:John Turmel (bc726@FreeNet.Carleton.CA) wrote:
:[...]
:: :[...]
:: :If I can start borrowing against my future income,
:: :wouldn't the money supply explode just as with fractional reserve
:: :banking, or interest-based loans, leading to similar inflation?
:
::      Besides, what do you do with the money you borrowed? Your
:: debt account went up and your cash account went up. You purchased
:: things meaning that though your cash account went down and your
:: asset account went up.
:
:Well, if I were playing with your proposed system, I could borrow
:money now against my entire lifetime's earnings, and spend it all.
:If others do the same, we'd have an explosion of the money
:supply, no?  Immediate inflation, no?  (And corporations have no
:lifetimes to limit them.)
:
     Spend it all on what? If you buy a house, the house is the
collateral for the chips issued. If you buy a car, it is too. All
we ask is that you repay your loan as fast as the collateral
depreciates.
     Sure there would be an explosion on the money supply but all
backed up with collateral or markers.
     There would be a commensurate explosion in employment and
economic activity.
     You must lose the "Edgie the economist" knee-jerk reaction
that an increase in chips necessarily means inflation. It doesn't
if there is collateral to back up the new chips or that your
economic enterprise is capable of repayment of the depreciation.

:: :Besides, it is never the case that `everybody borrows 10 and
:: :everybody owes 11' in the present banking system.  The banks,
:: :being members of the `everybody' set, borrow 11 and owe 10,
:: :balancing the numbers.
::
::      Please. This is a first. Borrowing 11 and owing 10? I've
:: heard of bankers getting preferential interest rates borrowing
:: $100 and owing $101 while everyone else would owe $110 but I've
:: never heard of anyone borrowing 110 and owing 100.
::      You'd better provide some proof as right now I think it's a
:: pretty ridiculous statement.
:
:Okay, by example.  Person A invests $200 in Bank B.  It
:promises to pay him 5% interest.  (Thus the bank borrows $200,
:owes $210, so far).  Bank B makes a loan of $200 to person C.  It
:charges that person 10% interest.  (Thus the bank has a new $220
:as a debit, $20 profit)  In total, the bank `borrowed' $200+$20,
:but owes $210.
:
:In other words, the borrow/owe relationship is inverted for a
:net lender when compared with a net borrower.
:
     Of course, when I say that people borrow 100 and owe 110, it
necessarily implies that the banker loaned out 100 and is owed
110.
     But to say that because the person owes an extra 10 which
was never issued into circulation and because the bank is to get
and extra which was never issued into circulation doesn't mean
the loans therefore balance.
     Besides, the banks do not lend out their depositors funds.
Each and every time a bank makes a new loan, new bank credit is
created, brand new money. (Graham Towers, Governor of the Bank of
Canada to the Banking Committee in 1939) Check any Economics
textbook on how banks create new money. So if they're lending out
new money, they're not lending out their depositors old money.

:: :Are you saying that the market is completely random?  What of
:: :competitive
:: [...]
::      Why, are you saying Von Neumann was wrong when he said that
:: "important question in economics arise in a more elementary
:: fashion in the theory of games?"
:
:The theory of games does not use randomness in every problem.
:A `game' != `game of chance'.
:
     But important questions in economics do arise in a more
elementary fashion using a game to model economic activity with.
J.C. Turmel
---

12) Subject: Re: TURMEL: The Third Way

     On Jul 10 16:44, 1995, fche@elastic.org (Frank Ch. Eigler)
wrote:

:John Turmel (bc726@FreeNet.Carleton.CA) wrote:
:[...]
:: :Well, if I were playing with your proposed system, I could borrow
:: :money now against my entire lifetime's earnings, and spend it all.
:: :If others do the same, we'd have an explosion of the money
:: :supply, no?  Immediate inflation, no?  (And corporations have no
:: :lifetimes to limit them.)
::      Spend it all on what? If you buy a house, the house is the
:: collateral for the chips issued. If you buy a car, it is too. All
:: we ask is that you repay your loan as fast as the collateral
:: depreciates.  [...]
:
:How about spending it on entertainment, going boating, going to the
:moon and back, hiring a dozen masseurs with accompanying
:belly-dancers.  In other words, *services*.  Or perhaps *renting*
:equipment or a home.  I'd own no more physical property than before
:the massive loans.  (Thus I don't have to repay the loan on the
:account of depreciation.)  But I could enjoy the value of the money
:regardless!  All for a loan that's given against my iffy future
:income.
:
     So if you joined a Greendollar barter system where people
trust that if you obtain services from them, you'll service them
back, you're saying you'd enjoy the value of the money and not
bother trying to pay those services back.
     It's true that Greendollar systems have experienced problems
from people who act like you say you would but they're quickly
thrown out and people won't trade with them. But such welchers
are very rare. Most people are quite prepared to repay work for
work and that is the trust we count on.
     But Greendollar systems don't allow people to have their
whole life's potential earnings to blow so they can stiff the
system for the maximum amount.
     Yet, I think that liberating the industrial capacity of
those who want to work will produce so much abundance that just
as we won't mind golden-agers spending their twilight years or
slower cousins living decent lives on an open credit line
provided for by the youth, I don't even think many will mind the
odd lazy drone who wants to end his life's score-card in the
negatives with the slower cousins.

::      Sure there would be an explosion on the money supply but all
:: backed up with collateral or markers.
:
:Not necessarily!
:
     And when the weaker members of society and the drones die,
we can take their negatives and spread them throughout the whole
database of producers deducting a small amount from each of the
more worthwhile members. That's how we can take care of the old
and the weak and the useless without getting in the way of the
workers.

:: :In other words, the borrow/owe relationship is inverted for a
:: :net lender when compared with a net borrower.
::
::      Of course, when I say that people borrow 100 and owe 110, it
:: necessarily implies that the banker loaned out 100 and is owed
:: 110.
:
:Yes, and your scenarios consistently exclude the banker as one
:of the players, leading to the seeming imbalance.
:
     I just don't know where you see balance between money and
debt. Count up the debts of the world and count up the money and
you'll see there's just no balance.
     Besides, this is the most unheard of suggestion I've ever
heard.

::      But to say that because the person owes an extra 10 which
:: was never issued into circulation and because the bank is to get
:: an extra which was never issued into circulation doesn't mean
:: the loans therefore balance.
:
:Why not?  It seems to exactly add up, if you agree that the
:bankers are just one of the bunch.
:
     Again, this is ridiculous. No one can possibly believe that
because the bankers are owed what the borrowers don't have makes
things balance.

::      Besides, the banks do not lend out their depositors funds.
:: [...] So if they're lending out new money, they're not lending
:: out their depositors old money.
:
:Why does this matter?
:
     It matters because all new money coming into circulation is
matched with a debt which grows beyond the original amount.
 

     On Mon Jul 10 12:00, 1995, Steve_Salter@mindlink.bc.ca
(Steve Salter) wrote:

::      Besides, the banks do not lend out their depositors funds.
::
:: Each and every time a bank makes a new loan, new bank credit is
:: created, brand new money. (Graham Towers, Governor of the Bank of
:: Canada to the Banking Committee in 1939) Check any Economics
:: textbook on how banks create new money. So if they're lending out
:: new money, they're not lending out their depositors old money.
:: J.C. Turmel
:
:Banks don't lend out their depositors' funds?
:Read an annual report from any of the banks, then report back to
:this newsgroup with your findings.   I notice that my bank has
:this big old sock lying in the back of the employee coffee room.
:I wonder.....!!!??
:
     If the banks are not lending out new money when they make
loans, the money supply would not go up. I say that the money
supply goes up when they make loans and hence, they're not
lending out depositors funds.
     That they've made up a rule that says they can't lend out
new money until new money has been deposited has fooled many
people into thinking that they loans they are getting are the
deposits the bankers were seeking in order to enable them to make
the loans of new money. Quite a scam.
     Since the newspapers regularly report that the money supply
goes up and down, if you say it isn't when banks make loans, then
tell us when the new money is authorized and where it comes from.

:Back to school J.C.
:
     All you have to do is read any elementary Economics text-
book on how banks create new money making loans through the
fractional reserve system.
     Back to school, Steve.
John "The Engineer" Turmel

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