Justice” during their week of education by Henry
Raynel September 2006. Lecture 2.
MONEY SUPPLY IS CREATED AND CANCELLED
— AS IT FLOWS THROUGH EACH CYCLE
& CONSUMPTION – OF ALL
SERVICE
Yesterday
we discussed a few facts about money that should have been taught during our
years of basic education in our schools. But of course if the truth of money
creation, ownership and management were taught in Schools that would let the
cat out of the bag and bankers could very well soon lose their financial and
economic power to rule the people of the world.
There
is only one thing bankers like more than money and that is the power, the power
that the control of money gives them.
It is
my duty and privilege today to progress our discussion to get understanding
beyond Money Creation.
Earlier we discussed the ownership of Society’s
money supply and the importance of enacting legislation to confer the right of
creation, ownership and management – to THE NATION – GOVERNMENT – AND THE
PEOPLE OF OUR NATION. – Our address and discussion illustrated the tremendous
benefit that would result for every individual in society.
Today I want to
discuss a little deeper — about enacting legislation to establishing Society
ownership and management — of its money supply
I also want to
briefly comment on two aspects — ONE about savings for investment. And SECOND
about the ability for society to repay its debts to bankers!
FIRST our priority right now is TO PROGRESS OUR DISCUSSION BEYOND MONEY CREATION — TO TALK ABOUT
MONEY FLOW AND MONEY CANCELLATION —
— AS IT FLOWS THROUGH EACH CYCLE OF PRODUCTION AND CONSUMPTION —
AND SERVICES
attached elementary illustration — I would like to talk to the illustrations
and answer questions after I have made this presentation.— Some of the main
points of this lecture are related to my next Lecture, that deals with:
Gap Between Incomes and prices”.
extensive political campaigning with Social Crediters has proved to me — that
the flow and cancellation subject — is a stumbling block for many of our
conscientious supporters.
difficult to understand and accept that money cancels automatically when it is
paid into commercial business bank accounts. My personal business use of bank
borrowing with bank demand for early repayment has helped me understand flow
and cancellation.
Cancellation is one of the reasons why many Social Creditors have not got the
confidence to advocate and campaign for society to actually own, create and
manage its money supply. Understanding gives confidence and enthusiasm to
become a crusader.
Society’s money supply flows continuously.
understanding of us leaders of our Social Credit Reform Movement. Because us
leaders have good faithful understanding of the philosophy of Social Credit,
because we have honest conviction that there is an alternative economic system
that can provide freedom with financial security, — the grass roots the
“will of the people” – the voter’s army – will follow their
leaders. The voters army must first pressure and gain political democracy,
which is the weapon needed to force Members of Parliament to enact legislation
to bring in economic and financial democracy!!!
reason for Social Crediters supporting general Socialist Monetary Reformers
organizations, who advocate Government should create and manage Society’s
Money Supply.
and his staunch disciples claim there is only one thing worse than a private
banking money monopoly and that is to marry bankers money creation with
politicians and Government, – and thereby, – create a complete government
dictatorship of both politics and finance.
has proved Douglas
correct.
CONTINUOUSLY FL0WS — AS IT IS CREATED FOR PRODUCTION — AND CANCELS ON
CONSUMPTION — PUT SIMPLY — THIS IS WHAT IS MEANT BY CREATION FLOW AND CANCELLATION.
system of money creation and cancellation that is very simple and fortunately
very efficient. There would be no need for a Government operating the New
Economics of Social Credit to change this aspect of how money functions.
of Society’s Money from the beginning of the money pipeline is Society
Owned and Independently Managed. I will explain this clearly in some detail
later.
Society’s total money supply flow as unrepayable permanent interest
bearing debt compounding exponentially. — “The Peoples Money Supply
must be Managed Independently by a Peoples
Independent State
Monetary Authority”
Cancellation of Society’s Money.
example, – bankers lend to our bakers – to bake today’s bread, and when
the consumers have bought the bread in the days ahead, the shops return the
money to the commercial bankers and it is cancelled, against yesterday’s
business loan arrangement — and if there is still a demand for bread in the
days ahead the process will be repeated.
distribution according to consumer demand. Money flows: — it is created as
bank loans for production and is cancelled as production is purchased and the
businesses bank the sales money in their banks on consumption. The old saying
is — money is made round to go round — and it’s meaning is still
basically true. Commercial Banks function and duty, is to create loan credit
(money) for production and to cancel credit (money) as production is consumed.
This creation and cancellation process is a logical
and efficient system and will continue in Social Credit modernised New
Economics. Graph!
consumption”? This involves a series
of stages of production, and the time needed to convert nature’s raw materials
— natures free raw materials — by the application of energy —
free harnessed solar energy — plus any needed human energy — into
finished goods and services from where they are purchased by consumers. The
cycle may take one year, one month, or less.
all energy except human energy, is our Natural Cultural Inheritance that
produces gift production for Society.
C H Douglas stated the fact as follows quote: …
“economic production is simply the conversion of one thing into another,
and is primarily a matter of energy. It seems highly probable that both energy
and production are only limited by our knowledge of how to apply them”.
End quote.
quoted but for professional proof of this. I will limit myself to one only.
Chancellor of the Exchequer, and Chairman of the Midland Bank, addressed a
meeting of shareholders of the Bank on January 25th, 1924, and said
(as recorded in his book Post-War Banking):
to be told that the banks can, and do, create and destroy money. The amount of
finance in existence varies only with the action of the banks in increasing or
decreasing deposits and bank purchases. We know how this is affected. Every
loan, overdraft or bank purchase creates a deposit, and every repayment of a
loan, overdraft or bank sale destroys a deposit.”
This
distinguished authority is acknowledgement and proof of my above statements
that banks create and cancel the flow of money as it daily flows into banks
reducing loans, and if needed for the next cycle of production it is created
and flows to finance the next cycle of production.
emphasise-
all industry and commerce, obtain their financial requirements directly or
indirectly from the commercial banks.
trading banks that purchase it with their own bank cheques.
creating and cancelling function with their cheque clearing facility. All our
commercial business companies, and even savings and lending institutions and
financial companies, — must process all their cheques and other financial
transactions through the commercial banks cheque clearing house. It is an
efficient system.
about “Ownership Of Money” and the constitutional establishment of
a Society’s Independent State Monetary authority.
Credit booklets: co-authored by The Social Credit
Secretariat Chairman Donald Neale and successor Secretariat
Chairman Alan Armstrong economist with an honours degree.
— ” Booklet 3 page16.
Published in 1994 by the “The Social Credit
Secretariat” Edingurgh.
Reform of the Money Supply System
power to create money must be withdrawn from the commercial banking system. The
creation of the community’s money supply, debt-free, must revert to a
governmental authority—a National
Credit Authority—charged with the duty of maintaining a strict
relationship between the volume of money supply and the volume of real wealth
production, allowing for imports and exports and for capital depreciation and
appreciation—thereby ensuring that there is always ‘effective
demand’ sufficient to clear markets in each productive period. All the
statistics necessary to do this are already available within the Central
Statistical Office.
would need to be so constituted as to be accountable to Parliament but to be
insulated from any form of political manipulation. In this respect it would be
similar to the Weights and Measures Office which is responsible for maintaining
and enforcing observance of correct weights and measures in all trading, while
being free from political pressure to tamper with those standards for political
advantage.
would inevitably prove inflationary must be
able to say why that must be so, when it would be created by precisely the same
means and from the same source—the national credit—as the banks,
and yet there is no allegation that bank-created money is inevitably
inflationary.
by means of which we deal with things—it has no properties except those
we choose to give it. A phrase such as “There is no money in the country
with which to do such and so” means absolutely nothing unless we are also
saying “The goods and services required to do this thing do not exist and
cannot be produced; therefore it is useless to create the money equivalent of
them”. For instance, it is simply childish to say that a country has no
money for social betterment or for any other purpose, when it has the skill,
the men and materials to create that betterment.”!!!
to further measures designed:
- To
eliminate all possibility of inflation through the introduction of a
scientific or Just Price; - To
eliminate the chronic deficiency of aggregate purchasing power with
aggregate prices, through the introduction of a National Dividend.
created on government account and would be distributed as purchasing power to
each member of the community as a right. It would be unrelated to earnings and
would be sufficient to ensure a ‘certain standard of respect, health and
decency which is the first desideratum’.
link between employment and income, a necessary reform when, through
technological progress, employment can no longer be regarded as the sole claim
to income”. — End quote! (See Booklet Two.)
!!!
clear then it becomes logical that Society’s total money supply can, –
and should be, – distributed in two flows, – one portion of the flow to
Government Treasury to finance all Government spending free of debt – and the second
portion of the flow as loans free of interest to bankers for them to finance
industry and commerce with low cost loan finance.
attached.
matter discussed and must not be taken to encompass all money flows in the
economy).
Government borrowing
would cease, and the National Debt along with taxation could be progressively
eliminated in a reasonably short time.
system, —
system — and the reason for the
inadequacy of our Society’s present incomes system — , we who
understand, have a responsibility to build – in a democratic way, – a grass
roots “will of the people” voters army, to pressure and force
MP’s to work in Parliament for genuine natural policies that voters want
— and to insist on the enactment of legislation appropriately.
bosses supporting and causing evil economics. MP’s are guilty puppets
responding to their Political Parties’ bosses and State Bureaucrats who
are receiving policy instructions from bankers’ visiting economists!!!
wanted by voters not policy foisted on us
by banker’s economic travelling salesmen —
THE KEY THAT WILL BRING SUCCESS IS THAT THE PRESSURE
FROM THE VOTERS CAMPAIGNING ARMY MUST BE GREATER THAN THE PRESSURE FROM
ECONOMISTS. THIS IS SIMPLE BUT FACT.
POWER ON EARTH.
we have is precious and we must use it.
freedom is financial security.
THAT CONSUMERS MUST SAVE TO FINANCE INDUSTRY & COMMERCE.
WORST TYPE.
income illustrates the falseness of the often-repeated statement that the main
source of money to finance industry and commerce comes from peoples’
savings.
main source of general investment finance is provided from peoples’
savings.
today’s goods and services
available in shops and offices, causes those goods to remain unsold. Only by
somebody, somewhere else in society borrowing extra bank created debt dollars,
can it be made possible for the goods represented by the saved dollar to be
sold.
The
savings propaganda not only helps to shroud the fact that the banks own and
create all of society’s debt money supply, but also it very effectively
portrays the false belief that there is no alternative and that we must pay
taxation robbery out of our wages, salaries and dividends.
The
international financial oligarchy’s well educated – well paid – economic
managers, their economists, are continuously traveling advising the State
Bureaucrats, Government Treasury officials and leading politicians of the
Nations of the World, the policies that suit the international bankers’
present evil economic system.
SOCIETY’S DEBT TO THE BANKING DEBT OWNERS
is a borrowed dollar from the commercial banking system. Bankers create all of
society’s money as debt – there is no other money in existence.
unrealistic for economists, university lecturers, politicians, and senior
highly positioned bankers to tell society that it must or even can pay back its
debts. It must be an absolute impossibility, because of the very simple fact
that all money is debt. If we could imagine all of our commercial bank loans to
be repaid, there would be NO MONEY IN SOCIETY AND THE ECONOMY AS WE FUNCTION
TODAY WOULD COLLAPSE.!!!
and highly positioned bankers carefully nurse the secret?
sky high.
businesses generate prices faster than they generate or pay out incomes. –
Graphics here!
cycles illustrated in this paper are relevant to the matter discussed and must
not be taken to encompass all money flows in any economy.
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Aside from one speech by Douglas entitled, "The Dictatorship by Taxation", can you reference where Douglas suggested that governement should be funded tax free?
The following is from Douglas' Draft Scheme for Social Credit:
"(10) Taxation of specific articles or specific forms of property to be abolished. Any taxation found to be necessary to take the form either of a flat non-graduated taxation of net income or a percentage ad valorem tax upon sales, or both forms of taxation together."
http://www.mondopolitico.com/library/socialcredit/appendix.htm