Re: General Theory Seminar--Moore

[Basil Moore <bmoore@xxxxxxxxxxxxxxxxx>]

John I am confused by several passages. I will reply in CAPS


At 07:58 AM 2/24/00 -0800, you wrote:
>Basil Moore wrote:
>>
>> John
>> Sorry if i have confused you. You misunderstand my intent.
>
>And you misread my comments.
>
>> I was merely making the point that, if people were unwilling to lend their
>> (fiat)money (cash) to the banks, but instead presented all deposits
>> immediately on receipt to the banks for fiat money (cash), the banks would
>> then no longer be able to create money. True they could lend out the money
>> of their shareholders, but that is not money creation.
>>
>> Remember, banks, although they create money(deposits), are also financial
>> intermediaries.
>
>Banks do not create "money" except by a very misleading
>definition of money.
>BANKS IN MY VIEW CREATE MONEY WHENEVER THEY MAKE A LOAN, AND ISSUE THEIR
OWN LIABILITY (DEPOSITS, WHICH ARE A MEANS OF PAYMENT AND SO MONEY) IN
EXCHANGE FOR THE BORROWERS' LIABILITY (IOU) WHICH IS NOT GENERALLY ACCEPTED
IN EXCHANGE. I AM DEFINING MONEY AS MEANS OF PAYMENT, THE THING THAT IS
GENERALLY ACCEPTED IN EXCHANGE AND AS SETTLEMENT OF LEGAL DEBT OBLIGATIONS.
>They only intermediate the creation of credit. Credit can be
>created by anyone at any time without license from government
>and without the availability of money.
NO. YOU AND I CAN LEND, BUT CANNOT CREATE MONEY IN THE PROCESS, AND SO
CANNOT INCREASE AD. I CAN ONLY LEND TO YOU MY SAVINGS, INCOME THAT I DO NOT
CONSUME MYSELF.
The only distinction
>between individually created credit and bank created credit is
>the transferability and redemption conditions of the credits.
>TRUE. BUT THIS IS A MAJOR DISTINCTION WITH PROFOUND IMPLICATIONS FOR AD
>Neither private nor bank credit is money in the sense of being
>the stuff used to pay taxes and settle court enforced
>obligations.
>THIS I DO NOT UNDERSTAND???? WHAT ARE YOU GETTING AT HERE??? I THOUGHT I
PAID MY TAXES AND SETTLED MY DEBTS BY SENDING THE GOVERNMENT OR CREDITOR A
CHECK, ie BY TRANSFERING MY BANK DEPOSITS?



>> >William F. Hummel wrote:
>> >>
>> >> Basil Moore wrote:
>> ><<SNIP>>
>> >> >If people were not willing to loan cash to the banks in exchange for
>> >> >deposits, banks would not be able to create money.
>> >>
>> >> How can this be true?  A bank does not even need deposits to make
>> >> a loan.  It only needs enough capital of its own plus a license
>> >> from the appropriate authority (state of federal).  In other
>> >> words, bank create (credit) money, they do not lend depositor's
>> >> money.
>> >
>> >First, bank "capital" is money; second, the assertion that all
>> >that is needed to create credit (not "money") is a license from
>> >government is false; third the assertion that banks do not lend
>> >depositor's money is also false. Other than that, you've pretty
>> >well got it.
>> >
>> >--
>> >                       -- jbod
>> >
>> >               Tax Privilege, Not People
>> >___________________________________________________
>> >Come visit and see a new economic perspective --
>> >       http://www.geocities.com/CapitolHill/1067
>> >           Comments/arguments welcome.
>> >.
>> >
>
>--
>			-- jbod
>
>		Tax Privilege, Not People
>___________________________________________________
>Come visit and see a new economic perspective --
>       http://www.geocities.com/CapitolHill/1067
>           Comments/arguments welcome.
>.
>