On Thu, 6 Apr 2000 13:33:46 -0400 Doug Henwood <dhenwood at panix.com> wrote:
> You must be talking about COMER, which is the Committee on Monetary
> Education & Reform, I think.
Yes.
> I think this is basically crankery - manipulations in the monetary realm
that avoid real battles over power and the distribution of resources. What does
it mean for the government to borrow from its central bank? Would the money
just be created out of thin air?
Yes, it is my understand that this is exactly what a loan is - money created out of thin air only to disappear again when it is paid back (this is exactly what the banks do... they open an account an put money it it - from where - from an 000-0001 account (or something like that - which isn't really an account, it's just a number that, at the end of the day [term of the loan], has to be 0). Please, correct me.
> Money is valuable only because it represents claims on real resources, i.e.
products of human labor. Taxation and borrowing from rich people may look like
movements of money, but they represent real resource transfers. Borrowing from
a central bank doesn't - it's just funny money. People who believe in these
schemes tend to believe "finance" is a kind of malignant growth on the
productive sector, and not something intimately tied to capitalist production.
It was my understanding that loans don't need to be anchored to anything concrete (esp. since banks are no longer obligated to have... what's it called... their own resources at stake or something. So the bank of Montreal, for instance, could give someone a loan, in theory, for a near infinite amount of money - and as long as the person could demonstrate that they could pay it back, the bank is able to finance the transaction. Again, please, correct me.
> But in a system where production is undertaken only if M'>M in the M-C-M'
formula, it's impossible to separate money and production. So I think these
sorts of ideas are worth talking about, but only to expose them as nonsense.
I guess, in my ignorance, I'd like to know if "currency" and "loaned $$$" are the same and have the same *legal* status, that doesn't make sense... but do you get the distinction?
What interest me is the *historicity* of COMER's claims - the fact that Canada, as have other nations, have already done this in the past. So it isn't a scheme as much as it is part of a prior montetary policy... unless someone is making shit up (funny history?)
talking about something i know nothing about, ken