John, Government is the source of the new money. (I am including the Fed and the Primary Dealers in the category including government also.) (Your statement that government does not create money, or "print" it to use the colloquial expression, begs the question of who does if they do not.
Wheat can be used as money, as can rice, seashells, cocoanuts, anything. Silver and gold can be considered bartered commodities, for that matter. Whatever is traded between men must have a substance (tangible or intangible), be able to be measured, and those measures can be counted as quantity. Or, if men prefer, they can just pretend they are trading something back and forth that doesn't exist -- but there must be agreement by both parties that what they are trading is purely imaginary or else we have the sin of deceit, of placing a stumbling block before the blind. You could even have theoretical honesty with imaginary quantites as long as you do not consider the issues of creation and ownership.
But do you see the difference, if the Powersthatbe say, "there is not enough money in the world, we need to increase it", so they decree that one minute after midnight on Sept 30, all the bank accounts in the world are going to be revalued by a multiplyer of 1.35. Now there is 35% more money in the world, and it is proportianate to the ownership of that money one minute prior to midnight. So what's the point, you have your "more money".
Whereas the way it is being done, is that all the new additional money belongs to a privately owned corporation/conglomerate such that they have the right to rent that property for profit, or take possession of the collateral pledged for the security of the money rented.
(Your retort that it is not money because it was created out of nothing is inaccurate, [I don't think my argument was that it is not money, I have been saying it does not exist] it is money because it can be traded for value, [Actually, there would be no point to the money, except that it can be traded for quantities of measurable substance. Who cares about "value", they need food and gas for their cars, and a house to live in] the only question is "How much value does the new money they create correspond to?") If you wish to say it is only the miners that create money because that is real substance, that is a bit limiting,
[Miners are not creating anything. They are manufacturing, the same way the farmer or the machine-shop operator is manufacturing something describable, definable, that exists -- and then that something is being used as money]
and since there is no gold backing money now, the question is what IS the stuff we are calling money now, and trading for value. (If you want to say it is NOT money because only God can create something out of nothing, 2) or that the money never leaves the bank because they are the ones that owned it or created it, or
[Something the bankers create would be able to leave the bank. Something the bankers owned would be able to leave the bank. The reason the dollar cannot leave the bank, is that it is not something. Bankers saying they owe someone a quantity, a quantity without any related substance or measure, is not the same thing as saying that anything exists. Just because I might say I owe you 100, and that it is humanly legal for you to authorize me to say I owe that to someone else, is not that same as there being 100 THINGS in reality that Christ created.]
3) that it has no Quantity Measure nor Substance,... then I submit you are laboring under a delusion about the fact of what money really is.)
If you want to say that the borrowers who promise to create goods and services are ones who create money, I would be willing to accept that as a possible way to view money creation, since they are the ones who created value associated with the money that was printed by the Fed/Treasury/Primary Dealers...
[When "one bank, New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008" from FedCentral NY, which the US government officially knew nothing about, what were the things that were "printed", and where, in the universe would you have found them? What instruments would have detected them? What mechanism would you imploy to verify that those things were truly in one place, and not another? How could you tell they were in Morgan Stanley and not in JP Morgan Chase, or the US Treasury? How could you know that Morgan Stanley was not lying when they said that they "had" them, as opposed to "not having them"? Would there be any way to verify, that in fact, the Federal Reserve had transferred something to Morgan Stanley, instead of just saying they had, when in reality they had not?
Borrowers can promise to create goods and services with what they borrow without ever dealing with imaginary quantities, fiat currency, any corporation which has the exclusive privilege to own and rent as much money as they "say" they "have". Anybody can loan another man the use of a piece of land, equipment, diesel, and seed -- and that man can take what is borrowed on the promise that he will create goods and services (wheat harvested). But that has nothing to do with the central issue. It is not "did he create goods and services", but did he pay back what he borrowed with the rent agreed upon? Really, that is not even the issue, what really matters is, who is profited by the addition of money in the pool, and who is robbed in the process What matters is: Has their been deceit and theft?]
The Government creates money that is put into existence via a complex circuit that includes agreements, interest, repayment terms... between the Fed, Primary Lenders, Commercial banks, and borrowers. You can say the money they create isn't real. But, this statement is contradicted by the fact that men act on it, trusting the exchange of their produced goods for money, and then money for consumable. Money is only a place holder for actual, useful, consumable value. Belief exists only as a spirit/soul/mind substance, but it is from that substance that all things are made. Man creates on this level just as does God.
[What does it mean to you, then, that: "3 All things came into being through Him, and apart from Him nothing came into being that has come into being."?]
Money is a bit more firm form of "belief" than the belief we have in Jesus as our Savior, but it is nevertheless at its essence a representation/talisman/token that represents our belief in the exchange of value that will take place.
[Why not then just have anybody and everybody create this new money/value, depending on the strength of their faith? Why rob or kidnap anyone who does this, except for an institution whose historical goal is to dominate all the nations of the world in defiance of the kingdom of Christ and God? Why only allow men who favor capital criminals and who derive their powers from communication with demons to be the only ones authorized to do this? Why defend this privilege just for those organizations of men who foment, initiate, sustain, and profit from war after war after war, with all their destruction of lives and property? Don't you remember anything of what Fritz Springmeyer, Alan Stang, and John Robinson have written? Have you ever heard of Fabian Socialists? Cecil Rhodes and the Rhodes Scholars?]
When government creates more money, gives it to welfare mothers to buy their votes,
[Giving money to anyone who shouldn't own it based on God's definitions of ownership, is going to be stealing. It will be stealing if they tax it from someone, or enslave someone to work without compensation to provide a good or service directly. It will still be deceit and theft, no matter whether the government itself or thecentral banking system -- say it exists, thus increasing global money supply, which in the long run ends up stealing the purchasing power from other dollar holders. The difference comes that if the banking system is creating it, the government will have to steal even MORE to provide the rent-profit to the banks, either by enslaving, taxing, or borrowing more.]
it simply reduces the value of the unit of money (there is more money in circulation, and no more goods and services available to consume -- the corresponding value per unit of money decreases -- i.e. inflation is the result of government printing money without filtering it through the sanctifying screen of loaning associated with the commitment to produce. (Note: one additional problem will cause inflation -- if the terms of the loan are long, then inflation can result. In other words, when money is loaned, and the repayment period is over a period of 30 years, the consumption is immediate, but the return of the commensurate goods and services to be made available for consumption in return for that "new money" will not occur in totality for a very long time. Thus, the new money is available for consumption in the economy, but until the commensurate value is produced there will be more dollars available to demand consumption than goods and service available to consume. This creates inflation also.
[I don't see any difference. What the Federal Reserve publishes (modern money mechanics), and the Austrians teach -- is that the money created at the initiation of the loan goes out into the market, then disappears again upon the instant any of the principle is paid back. So, of course, the longer the period of the loan, the longer that much principle is inflating the money supply (in the constant, rolling generating and retiring of all the debts in the marketplace that were initiated by fiat creation). But it is not like some additional source of inflation is kicking in because it is a 30-year debt, in stead of a 1-month debt. We are just saying how long some of the principle will be outstanding.]
In the case of government printing, and giving it to the welfare mother, the problem is that lack of a corresponding real QMS available for consumption associated with that new money that has been put into circulation. Objecting that man cannot create things is inaccurate -- men create ideas out of nothing, and contracts out of nothing. Action is then associated with those ideas and contract, and there is then quantity, measure, and substance manifested. Creation at its essence is the bringing the patterns in the mind into manifest creation. Money is a contract that was passed from another who had obtained it by making a contract, etc. At each step along the life of money, men spoke money into existence by the commitment to produce value in return for the possession of the money. The question is not whether money exists by its de novo creation by government/treasury/fed/Pri Dealers..., but whether men will accept it in trade for value. The QMS of money is the associated value of the trade, in other words, the QMS of money is always trade specific, and IS the Quantity Measure and Substance that men accept for it in trade, but that QMS is always negotiated in the context of a larger system where others are trading and accepting value for money, and money for value. In the case of government creating Money, this is merely an example of a group taking credit for creating something out nothing, rather than naming the individuals who were responsible for this particular policy that resulted in the appearance of the idea or contract.
T.
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Modern money mechanics
1: The stated purpose of the Book: "Introduction: The purpose of this booklet is to describe the basic process of money creation in a "fractional reserve" banking system.?"
3. Nature of USD defined: "Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries." "money used in transactions is mainly of three kinds - currency (paper money and coins in the pockets and purses of the public); demand deposits (non-interest bearing checking accounts in banks); and other checkable deposits, such as negotiable order of withdrawal (NOW) accounts, at all depository institutions, including commercial and savings banks, savings and loan associations, and credit unions." "In the remainder of this booklet, "money" means M1"
2. Surprises in definition of money supply: "However, only the cash and balances held by the nonbank
public are counted in the money supply. Deposits of the U.S. Treasury, depository institutions, foreign banks and official institutions, as well as vault cash in depository institutions are excluded."
This means that none of the USD the government "has" in their accounts at the Treasury is counted; none of the "reserves" the member banks carry and borrow from each other, nor the banks which have accounts with each other. If the FED does a currency swap (We'll owe you Euros if you owe us dollars) equivalent to 16 trillion dollars with the ECB -- This does not increase the money supply!
4. Definition of "value": "it is the confidence people have that they will be able to exchange such money for other
financial assets and for real goods and services whenever they choose to do so."
5. Admission of relationship of qty & purchasing power: "Money, like anything else, derives its value from its scarcity in relation to its usefulness. "Commodities or services are more or less valuable because there are more or less of them relative to the amounts people want." "Control of the quantity of money is essential if its value is to be kept stable"
6. Banks create it: "Who Creates Money? Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank. The actual process of money creation takes place primarily in banks."
"Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money."
"What Limits the Amount of Money Banks Can Create?"
7. Loaning creates: " money...increase when ...proceeds of loans made by the banks are credited to borrowers' accounts."
8. Nothing new about it: "This unique attribute of the banking business was discovered many centuries ago."
9. FED Central NY creates thru purchase of securities: "Let us assume that expansion in the money stock is desired by the Federal Reserve to achieve its policy objectives. One way the central bank can initiate such an expansion is through purchases of securities in the open market. Payment for the securities adds to bank reserves. Such purchases (and sales) are called "open market operations.""
"Bank A's reserve account at the Federal Reserve is credited for the amount of the securities purchase. The Federal Reserve System has added $10,000 of securities to its assets, which it has paid for, in effect, by creating a liability
on itself in the form of bank reserve balances. These reserves on Bank A's books are matched by $10,000 of the dealer's deposits that did not exist before."
