Not quite, daggett.

>>In my view Pericles is attempting to turn this discussion into one of semantics in an attempt to avoid acknowledging the incontrovertible evidence that private bankers' interests are immensely detrimental to the interests of society as a whole.<<

On the contrary, I seem to be surrounded by folk who want to turn the whole process into some political polemic - along the lines "Banks are evil, governments can be trusted".

All I have been trying to do is to retain some foundation in the realities of finance and trade, simple arithmetic and the needs of our society to function effectively.

>>there is an obligation to pay back the debt with compounding interest which, as I have shown, is an impossible obligation for society, as a whole, to meet.<<

You may think that you have shown this, daggett, but you patently have not. When challenged to support your supposition with facts, you simply ducked for cover. Pointing your cursor to a couple of nutters on YouTube, who are saying things that you clearly do not understand, does not constitute an effective argument.

Fickle Pickle makes the same strange assumption.

>>Even when I show you how to fit the system into double entry bookkeeping model by giving zero interest loans that may or may not be repaid you still do not accept the underlying proposition.<<

Now stop fibbing, FP. Where did you even come close to achieving this little miracle? Zero interest loans that "may or may not be repaid"? That's not finance; that's charity.

>>Unless you recognise this you will never understand what I am talking about and why it works.<<

Dam' tootin' right there, pal.

I strongly doubt I would be Robinson Crusoe on that score either.

>>Pericles is very adept at reducing all economic activity as a double entry book keeping charade<<

meantime:

"Arjay is very adept at reducing all economic activity to the creation of money from thin air"

Every building needs bricks, Arjay. Keeping accurate records via a set of readable accounts form the brickwork of any credible financial system.

Including the Government's.

I note Pericles has failed to take up the challenges I made in my previous post and has said nothing substantial in has last post.

Pericles, what's wrong with engaging in a political polemic on Online Opinion? Anyway do you seriously maintain that you aren't also doing the same?

Pericles, yes, I think I have shown that repaying debt to private bankers with compounding interest "is an impossible obligation for society, as a whole, to meet."

If you insist that I have not, then please show where my argument was wrong.

What challenge was that, daggett?

>>I note Pericles has failed to take up the challenges I made in my previous post<<

Was it this one?

>>I think I have shown that repaying debt to private bankers with compounding interest "is an impossible obligation for society, as a whole, to meet."<<

That's hardly a challenge, daggett. As I pointed out at the time, if it is possible for an individual to take out a loan, and repay it with interest (as millions have done) then there is no logical reason why "society as a whole" cannot.

You failed to show anywhere that the two situations - millions of individuals meeting their obligations, and "society" doing the same, can possibly be different.

Yes, people can and do default on debt. But that doesn't mean that they will inevitably do so.

Where's the logic, daggett?

Actually Pericles, the challenges were, once again:

"... instead of continuing to split hairs, why not tell us why you think it was a bad idea for Lincoln not to have financed the war by borrowing from banks?

"And tell us why you think that North Dakota would be better off today without its state owned bank?

"And why not tell us why you think the British Parliament was right in the middle of the 18th century to force the American Colonies to borrow from private British banks instead of simply printing their own money?"

These are concrete examples of how financial systems have worked vastly better when the power to create money has been placed in the hands of sovereign governments which are accountable to ordinary people instead of in the hands of secretive private banking cartels.

---

Pericles wrote, " if it is possible for an individual to take out a loan, and repay it with interest (as millions have done) then there is no logical reason why 'society as a whole' cannot."

Yes there is, Pericles.

As I already said, if all money in circulation originates as loans, then it is only possible the principle alone to be repaid by society as a whole. If both the principle and interest have to be repaid, then it is not possible for all that money to be repaid unless the economy expands forever.

I think the word you need to stress in your argument, Daggett, is TIME.
The major problem, as the Post Keynesians and followers of Minsky et al understand, is the egregious levels of debt; a situation which cannot be relieved by going into more debt.
Currently, as already mentioned, 97% of all world currency exists as credit. As Keen points out, it's not about having a fiat money system with a credit component tacked on, but rather the reverse.
We have a credit money system, with a very small fiat component.
Banks are inherently bankrupt. At any given time, they have only a fraction of their assets on hand to meet creditors claims. And those assets are nothing more than IOUs, all of which could not possibly be honoured on the spot.
Mortgage agreements include the right of banks to onsell the contract. The buyer has the right to change the terms of the contract, or demand payment of the full amount on the spot. When the mortgagees can't meet these obligations, they are thrown out on the street.
Although have you heard the latest Obama bailout? Some of these people will be allowed to rent the homes they were going to own.
Does that really make sense to you, Yabby and Pericles?
Money outstanding is currently about 2 and ½ times the world GDP, and this gap is constantly widening.
This is the legacy we are leaving our next generation, and the one after that.
In the last great depression, there were stories about bankers and stock brokers jumping out of windows. Millionaires losing everything.
This time, the millionaires are still receiving bonuses, and the big losers will be pensioners.
Super funds are history.

Daggett,

You are correct. The current method of increasing the money supply through the use of loans also means that we have to increase the money to supply the money for interest.

The current method where central banks attempt to control the money supply through changing the interest rate at which they lend to increase the money supply does not work very well. The fact that they "target" inflation shows how ineffective it is.

If the government took responsibility for increasing the money supply and if we stopped banks creating new money through loans then we would have a much better system. However, we need to require the new money to be spent on building productive assets for this approach to work. We cannot increase the money supply and allow the increase to be used for consumption otherwise we would get inflation.

One reason it would be better is that we would now have a true market place in money. If the money supply was too low then the interest rates would increase and governments could increase the supply and if the money supply was too high the government would decrease the money supply.

My proposal for a bank to start to issue zero interest loans for specific purposes would work as a way of increasing the money supply in a productive way. Governments would soon get into the business of directing new money for community purposes where the communityu externalities are high value but the worth to individuals are low. Project such as the National Broadband Network and the building of Renewable Energy Plants to reduce green house gas emissions.