JR:  Carl, this could happen only if the State Bank was established as a central bank, issuing reserves rather than needing them to function.  I do not believe this is allowable under your constitution  and legislation.

Let’s be clear on this.  Commercial banks (which present State banks are) do not need reserves to lend.  But they do need them to follow deposits of their money into competing banks.  If they outstripped other banks in their activity, they would quickly lose all their reserves and be wiped out.

If you doubt this, I could forward you a paper I have done on bank functions.  It has been checked by the brilliant convener of Economic Reform Australia.

Me:  As I said before the Bank of North Dakota might be able to simply issue credit as a gift along with any money they distribute as debt via loans. The truth is, as Steve Keen has shown that all Banks issue credit FIRST….and look for reserves later…and if part of the credit they issue is simply a gift….there isn’t any counter party anyway…so why would it present a reserves problem???

And if the FED or the Banks want to fight it out with us…take it to court where their obvious selfish self interests can be broadcast as diametrically opposed to the interests of both business entities and the individual. Come to think of it, it’s probably an excellent way to get publicity for public banking, monetary Gifting as the new paradigm, the dual and necessarily balancing nature of dividend and discount policies and the wisdom of the concept of subsidiarity/states rights. Pfffh! It’s a great way to awaken the
vocal Trumpist right to REAL monetary and economic reforms.

wisdomicsblog.com

JR:  Steve, I have explained why this would present a problem.

The bank could be taken over by others.

Yes, it could get reserves from, the Fed., thus going into debt to it.  Do you really think an orthodox Fed., under the control of the major banks, would continue to fund this process?

Me:  Do you understand that the credit component of a gift does not require additional reserves….because the gifted amount actually serves as reserves/fulfills the function of reserves itself and that there is no counter party to the one way nature of a gift?

I don’t care if someone tries to take over the bank, or the FED self interestedly refuses to back such monetary policy, as I said that would be an excellent opportunity for a states rights/monetary policy educational law suit.

Before the Federal Reserve Act there was an era known as “Free Banking” where private Banks simply issued money to borrowers. Some on the right still think this is what we should return to, but as Steven Zarlenga correctly showed in his book the Free banking period was the most unstable and corrupt era of our Banking history and was a major impetus, justification and enabling of the Federal Reserve Act.

What I’m saying is we had that historical precedent, and that if State and even private Banks were able to do such again, BUT WERE ALSO REQUIRED TO DISTRIBUTE A DIVIDEND AND THEY ALSO (OR PERHAPS A FEDERAL MONETARY AUTHORITY) PRONOUNCED AND DISTRIBUTED THE REBATED DEFLATIONARY DISCOUNT PERCENTAGE….there wouldn’t be any instability, but instead a great stabilization.

So put that down, right next to my Project Wisdom and Grace, as another suggestion by me to find a way to advertise, publicize, market and raise consciousness about integrative monetary and economic policies.

Kevin:  An explanation of how low cost high value distributed loans will evolve the financial system without major disruption.

Me:  Financial cost cutting is fine, but if the rest of the economy other than Finance inherently, that is naturally, produces a greater flow of costs than it simultaneously creates a flow of individual incomes….the system will remain unstable.

Kevin:  Steve,

Me:  Kevin,

(caps only for emphasis)

I never said YOU were advocating increasing costs. I said that you were cutting FINANCIAL costs, which is fine, but if costs still exceed individual incomes as a flow IN THE ENTIRETY OF THE REST OF THE ECONOMY OTHER THAN FINANCE AND WE DON’T ACCURATELY ACCOUNT/COMPENSATE FOR THEM….we’ve ignored, missed and left unresolved a more subtle and deeper problem. And even if one doesn’t want to believe that this lack of accounting is the problem, futurists predict that artificial intelligence will eliminate nearly 40% of our present jobs making the problem identified by Social Credit almost 100 years ago true by another means….and its policies necessary….unless we want to become some absurd socialist work state where you have to chew gum for 8 hours a day in order to “make a living”….rather than accept our freedom and leisure and find some satisfactory SELF DETERMINED activities to enrich our lives because the policies of Social Credit are intelligent and gracious enough to save us from such idiotic homo economicus non-thinking.

Kevin:  We both have no idea what will happen when we cut the costs of the financial system. Your statements may or may not be true.  We will only know what happens when we do it.

Me:  Well, until we find some way to eliminate the effects of wear and obsolescence by the physical universe and the force of competition, which my best guess is never, the necessity for the dual policies of
Social Credit/Wisdomics/Gracenomics will remain and become ever more urgent as capital in the form of buildings and other productive means continues to grow.

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The derivatives insanity simply must be unwound in some civil and sane fashion which means the Banks cannot be allowed to either steal the public’s savings or disrupt and/or collapse the entire system. Whoever is president must have the balls or the chutzpah to stand up to such naked domination by Finance.

wisdomicsblog.com