The Death Pledge by Will Waite

Ref: should probably know that the literal meaning of mortgage is ‘death pledge’. According to the Australian debt clock we owe 1,647,386,800,000 dollars to banks as housing debt. It's about 90% of all household debt in this country and it is accumulating faster than GDP. In its March 2017 Monetary Policy Meeting the Reserve Bank noted that household debt was rising faster than household income.

It is usually the public’s want of restraint that is blamed for the worsening private debt problem; hedonistic public needs to tighten its belt and stop living beyond its means. Bad, pampered public. Mainstream reporting on Australia’s private debt level goes out of its way to avoid making clear one crucial aspect of what is driving it. This money that people are borrowing is required to run the economy. We have explored in detail how the money we use everyday is created by banks when people borrow. The primary concern of finance is how to induce people to borrow enough money to keep the economic system jerking along. The fact is if we didn’t borrow so much money we’d be berated for lack of faith (confidence in financial terms) and the economic pundits would be decrying the next round of crisis, depression, recession, downturn or whatever word their employer's banker told them to use.

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Social Credit USA 2017 - A Monetary System for all Americans (Australians-ed) by M. Oliver Heydorn

Isn’t it about time that we had a financial system that worked for all Americans? The Social Credit proposals of the engineer, Clifford Hugh Douglas, explain the kind of monetary reform that needs to be implemented in order to fix our current dysfunctional debt system.

1. In economics, the common good consists in this: all of the members of a society are able to obtain the goods and services that they need to survive and flourish with the minimum consumption of material resources and of human labour.

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So Andrew Bolt, of the Herald Sun thinks that Pauline Hanson has “caved” in, has “backflipped” on the issue of penalty rates for hospitality and retail workers- March 28, 2017 8:10am:

“One Nation leader Pauline Hanson has backflipped on her stance on weekend penalty rates, announcing her party won’t support the Fair Work Commission’s ruling to slash weekend rates for hospitality and retail workers. In a Facebook video posted on Monday evening, the One Nation leader said she had changed her mind after experiencing a backlash from her supporters. “Let me make it quite clear. After listening to people coming through my office, and on the streets, and back home over the weekend in the lead up to this, generally the majority of people do not want a cut to penalty rates,” she said. “You’ve got my support. I’ve listened and this is what you want and I will not support any cut to penalty rates”.

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Cancel debt, prevent inflation and to decentralise financial control of production to the consumers. Geoffrey Dobbs wrote of C. H. Douglas’ 1924 proposal in an August/September 1988 “Home” journal Book Review:  A Personal Basic Income For All: “In 1924 C. H. Douglas put forward a specific proposal for a National Dividend in his book Social Credit in an appended Scheme for Scotland. This was, and remains, the best known of the proposals put forward by C. H. Douglas and the Social Credit Movement which he initiated, though never as an inflexible objective or a panacea, always as a part of a package accurately designed to cancel debt, prevent inflation, and to decentralise financial control of production to the consumers….”


---- has been filled by borrowing" so explained The Guardian, in a 16 June 2014 article. Well, the situation has not changed since then, and those who can, are still borrowing and adding to the debt burden we all suffer under.

Under the heading The Coming ‘Tsunami of Debt’ and Financial Crisis the article reads: “Forces that caused the world economy to collapse, including income inequality and debt, are again in action, and could drag corporations down in their wake

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Further Comment on A & B Theorem

I love when you type out an email, accidentally hit the wrong key, and erase it all! #@!!

I agree with what you write in your email, Joe, with one caveat, ceteris paribus (all things being equal).

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Further Discussion on A+B Theorem

it is more an accounting theorem than an economic one On Tue, Mar 21, 2017 at 2:40 PM, C…. L…. wrote:The A+B theorem, at its core is essentially the same problem that Marx struggled with. How can an employer make money if the cost of the product is equal to the cost of labour? In order for the corporation to be profitable, they have to charge more than the labour cost in order to produce a profit. Douglas extended this to the entire economy, and that’s where his arguments come from.

Response Hi C…..:Actually, while there are some similarities between Marx’s analysis and that of Douglas (how capital and control of it direct the economy), there are some rather big differences as well.

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THE SHORTAGE OF PURCHASING POWER – HENCE DEBT! In both cases cited previously, the core of the problem lies elsewhere.

C.H. Douglas and the A+B Theorem

Purchasing Power and PricesThe simplest method of obtaining a physical conception of the situation is to regard the money system and the price system as a double-entry system of book-keeping. Every article which is produced has a price attached to it, and somewhere on the opposite side of the account there should be a sum of money capable of moving each and every article out of the production system into the consuming system. Since money is the mechanism by which the consumer gives orders; no money, no order; no order, no delivery; and ultimately, no delivery, no production.Having this conception firmly fixed in your minds, you will see at once that if the total amount of money available on one side of the account is less than the total amount of prices on the other side of the account there must be something remaining unsold always. ---- Warning Democracy p. 31.

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State Member for Mount Isa Robbie Katter has slammed the LNP for supporting Labor to vote against a real solution to address rural debt.  In a parliamentary session that went into the early hours of Wednesday morning the KAP’s Rural and Regional Adjustment (Development Assistance) Amendment Bill was denied a vote in the House through the blocking of a motion put forward by Robbie Katter.

“The motion was put forward to enable the Parliament to adequately consider and vote on a solution that would’ve seen a new lending mechanism established to address the shortcomings in QRAA’s current activities”“Each member of the crossbench voted to allow the motion to be heard but it was the major parties who didn’t allow it. It’s unbelievable that they would so blatantly work together to stifle a minor party Bill.”….

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I know two swallows don’t make a summer, but I live in hope that more and more readers will seriously consider C.H. Douglas’ A+B Theorem. 

After reading the two following articles on the debt structure the folk in this land are burdened under, serious interest might just be stimulated.

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The Daily Mail online, 15 March 2017, tells it readers:“Theresa May has been warned she faces ‘war on two fronts’ with Nicola Sturgeon and the EU after the Scottish First Minister demanded a fresh independence referendum.Former Foreign Secretary Lord Hague said Miss Sturgeon would exploit inevitable difficulties in Brexit negotiations to push the case for breaking up the UK.Meanwhile, Brussels will use the need to appease Scotland to undermine the PM’s attempts to drive a hard bargain.The warning comes as the Brexit Bill officially enters the statute books, with the Queen due to grant Royal Assent later.But although Mrs May is now formally authorised to trigger Article 50 and begin the Brexit process, she has put the moment off until the end of the month…”Read more:

The difference is between centralized and decentralized power  What it does not tell its readers - from Wallace Klinck, Canada:“Scotland (like Quebec) adheres to Napoleonic or Continental Law which is incompatible with English Common Law and does not protect individuals in the same way.  Their sympathies toward the EU, and those of N. Ireland, are clearly seditious if Great Britain is to be considered a unitary sovereign nation.  If Scotland and Britain as a whole functioned under an honest and realistic financial system this divisive influence would dissolve and fade away.  A house divided against itself cannot stand.  The problem is a lack of recognition of inheritance and its confusion with welfare—which latter is tax-based.  This fatal misunderstanding is the Achilles Heel of the Conservative Movement.  A world of difference.”   Read further…    (Robert Klinck - “Economists’ Failed Professionalism” - 2016)     


It was said nearly a century ago, even if at the time, Douglas was referring to politics in America and Britain:

“So far as can be seen by the unprivileged observer, Mr. Hoover has not so far given to Wall Street any serious grounds for anxiety, although his endorsement of higher tariffs is no doubt offensive to international finance, which is quite clear in its own mind that the only desirable tariffs are those which are imposed by itself through the medium of the exchange rates.

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A lost century in economics: Three theories of banking and the conclusive evidence

Richard A. WernerCentre for Banking, Finance and Sustainable Development, Southampton Business School, University of Southampton, United Kingdom

AbstractHow do banks operate and where does the money supply come from? The financial crisis has heightened awareness that these questions have been unduly neglected by many researchers. During the past century, three different theories of banking were dominant at different times: (1) The currently prevalent financial intermediation theory of banking says that banks collect deposits and then lend these out, just like other non-bank financial intermediaries. (2) The older fractional reserve theory of banking says that each individual bank is a financial intermediary without the power to create money, but the banking system collectively is able to create money through the process of ‘multiple deposit expansion’ (the ‘money multiplier’). (3) The credit creation theory of banking, predominant a century ago, does not consider banks as financial intermediaries that gather deposits to lend out, but instead argues that each individual bank creates credit and money newly when granting a bank loan. The theories differ in their accounting treatment of bank lending as well as in their policy implications. Since according to the dominant financial intermediation theory banks are virtually identical with other non-bank financial intermediaries, they are not usually included in the economic models used in economics or by central bankers. Moreover, the theory of banks as intermediaries provides the rationale for capital adequacy-based bank regulation. Should this theory not be correct, currently prevailing economics modelling and policy-making would be without empirical foundation. Despite the importance of this question, so far only one empirical test of the three theories has been reported in learned journals. This paper presents a second empirical test, using an alternative methodology, which allows control for all other factors. The financial intermediation and the fractional reserve theories of banking are rejected by the evidence. This finding throws doubt on the rationale for regulating bank capital adequacy to avoid banking crises, as the case study of Credit Suisse during the crisis illustrates. The finding indicates that advice to encourage developing countries to borrow from abroad is misguided. The question is considered why the economics profession has failed over most of the past century to make any progress concerning knowledge of the monetary system, and why it instead moved ever further away from the truth as already recognised by the credit creation theory well over a century ago. The role of conflicts of interest and interested parties in shaping the current bank-free academic consensus is discussed. A number of avenues for needed further research are indicated.Ref:


"In relation to the fundamental flaw with the financial system which has been carefully identified and addressed by Dr. Heydorn in this article, it is interesting to note that the Bank of International Settlements postulated two theories in its 2015-2016 annual report - secular stagnation and financial bubbles, as explanations for the current malaise.I think we could argue that these two are actually interrelated: secular stagnation is inevitable since costs rise faster than incomes: financial bubbles are the result of attempting to overcome such stagnation with increased borrowing. In which case, by tackling the first, (through a National Dividend, perhaps along with a Just Price mechanism) we can prevent the second."

Oliver continues: I also came across this article by Dr. John Hussman which presents his analysis of the causes of US economic stagnation:

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According to the campaign hype in West Australia, if elected Labor will create more jobs and if re-elected Liberals will sell off one of the State’s assets to help pay its financial debts. The ABC News reports: “WA election: Jobs, debt and pumping tunes at Liberals' and Labor's launch events”Ref: Talk about political stooges for the Money Power!  Vote for either party and West Australians can expect more of the same – only worse than before as the situation deteriorates.

Oliver Heydorn sent us the following report which is worth reading and digesting.  It seems the real situation is finally sinking in. But first his article: What's Wrong with the Financial System? A Social Credit Perspective by M. Oliver Heydorn, February 13, 2017

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Thanks for this latest report, Cory.Interesting to learn that you have terminated your past political allegiance and decided to pursue a new approach.  You express concern about the accumulated financial debt burden bearing upon Australian society.  Precisely what do you suggest as a solution to this problem?  Under the existing financial system you will be entirely unable to improve this situation or even to halt the relentless growth of that debt. 

All nations operate essentially under the Keynesian system of debt finance.  This system generates financial costs at an ever greater rate than it distributes effective consumer income.  Under existing rules there is no alternative whatsoever but to incur more debt in a futile attempt to compensate for this growing shortage of effective income.  Because this deficiency increases as industry modernizes, and non-labour costs increase relative to labour costs, the financial problem intensifies with every increase in productive efficiency achieved through increasingly refined real capital enhanced by improving technology.

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In October of year 2017, the centenary of the completion of this wide brown land’s East-West railway will be celebrated.  There is quite a story to be told in relation to the East-West railway - stretching from the east coast to the west coast of Australia – and how it was built without debt to the people.In the Preface to the ninth edition of “The Story of the Commonwealth Bank” July 1940 D. J. Amos, F.A.I.S. took us back into the historical background all Australians need to know. Preface to the Ninth Edition"The Story of the Commonwealth Bank" was originally delivered as a lecture before the Sturt Electoral Committee, Adelaide, and was first printed in pamphlet form in 1931. It exhibited the usual defect of all lectures, namely, condensation of the subject matter to an extreme degree.The great and unexpected demand which arose for the pamphlet found me so closely occupied in other work that the second and third editions had to be printed practically unaltered, and I began to be more and more sensible of the need for amplifications and additions. These were accordingly made in the fourth (revised) edition, after which only minor additions, for the sake of clearness, were inserted in subsequent editions until the eighth was called for. It was then found necessary to continue the story up to Australia's entry into the second world war (1939), and also to include in it a short account of the note issue.  In the present (ninth) edition it has been deemed advisable to mention very briefly some important paragraphs in the Report of the Royal Commission on the Australian Monetary and Banking System (appointed in 1935), as this most important report is now either out of print or has been withdrawn from circulation.It only remains for me to thank the general public for the cordial reception they gave to all "The Commonwealth Stories," and which encouraged me to persevere and complete the series.ADELAIDE, July, 1940.D. J. AMOS, F.A.I.S.

More on this matter will be brought to the light as we approach the centenary in October. Read D.J. Amos’ work here…. [PDF]The Story of the Commonwealth Bank - Australian League of Rights Library PREFACE TO THE NINTH EDITION"The Story of the Commonwealth Bank" was originally delivered as a lecture before the Sturt Electoral Committee, Adelaide.


“If trade stops, war starts"says Jack Ma, Alibba’s CEO. Is this a threat, a warning or a realistic assessment of the situation? According to The Independent Online, 6 February, 2017, Mr. Jack Ma, the CEO of China’s biggest online retailer warned: "Everybody is concerned about trade wars. If trade stops, war starts."  Mr. Ma visited President Donald Trump last month and announced his company would help create one million jobs in America – and added, "The world needs globalisation, it needs trade".  Now, why is that so?  Surely America can ‘create’ its own jobs without the help of this Chinese man?     During WWII Ezra Pound, then living in Italy, wrote:

“If you live on cliches and lose your respect for words, you will lose your ‘ben dell intelletto’. (Dante Inferno’ 111, 18. ‘Homely English wording gets that down to ‘USE OF YOUR WITS’, but I reckon Dante meant something nearer to Mencius meaning sense of ‘EQUlTY’).

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I think I see just what is planned for at least one section of the society.  Yes, a Universal Basic Income (UBI) will come in – there are too many millions who cannot get a job because of technology and robotics taking over, and replacing them in the workforce.  In such circumstances, too much danger of the Precariat revolting and the elite losing control of this world order.

But it is not intended that the UBI will be issued through new credits/money, as the National (Consumer) Dividend would be, but only through the raising of more taxes by governments and/or more debt taken on by governments.

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Restoration of The Commons

from the Social Credit Discussion Group:Question and statement:It is true that Social Credit was never proposed or discussed by the Fathers of the Church, the Doctors of the Church, or even the great Reformation theologians. It may be one way of improving the distribution/sharing of wealth, but not the only way. According to Acts of the Apostles, the earliest Christian community held all goods in common. No one kept anything for him or herself. Similarly, the great cenobitic communities of pagan, Christian, and other (such as Buddhist) traditions. In our contemporary times, the Focalare Economy of Communion takes a different approach to achieving a degree of equity in a community. In fact, in terms of spiritual development and commitment, these traditions offer something that Social Credit does not: personal gift and personal renunciation. Social Credit seems in some respects rather like a way of restoring the "commons", the pre-capitalist provision that certain lands were dedicated to communal purposes, so anyone could graze stock, gather wood, catch game, etc. of course, after the notorious Enclosure of the Commons, appropriation of that common resource for the private exploitation by the gentry, country-folk who snared a rabbit for the pot could hang for poaching.Social Credit seems to postulate an analogy to the "commons" in the society's endowment of technology, institutions, etc.  Please correct me if I misapprehend that point. G

Response:Yes, Social Credit is a method of restoring the commons within the context of an industrial or high-tech economy. By taking advantage of the flaw in the existing price system, i.e., the fact that the financial system creates costs in the form of debts to the banking system (since most production is undertaken on the basis of short-term and/or long-term bank loans) at a faster rate than it distributes incomes to consumers (in the form of wages, salaries, dividends, profits, etc.), Social Credit proposes to introduce a new principle of distribution that would represent the 'free gift' or 'free lunch' inherent to economic reality.

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