Тред №258942

Interest -   Not For Regulating Credit . . .
The conditions under which the bank (not the Communist Party) grants loans are not governed by hard and fast rules, but are based upon a review of the general conditions prevailing in the given branch of industry. Since interest rates in a bank- planned  economy  do  not  need  to  play  the  role  of  a  credit
regulator, (as they do in western economies) the interest rates can remain stable at one level year after year, thus guaranteeing the stability of the credit ruble money system. These interest rates at present vary between two per cent and four percent, depending on the nature of the loans. These interest rates are regulated, not to generate  a  certain  revenue  for the  State  Bank,  nor to  control
credit in circulation — but to consume out of circulation, the State Bank's expenditure rubles, to prevent a redundancy of free- rubles in circulation, which free-rubles would tend to dilute the bank's control over the Soviet economy.
The State Bank finances the economy of the Soviet Union to an amount of many billions of rubles annually — as seen from
various reports, over a trillion rubles annually. All funds are originally derived from the State Bank's "currency issue power" to create new credit rubles, either as loans or grants to the credit of the Soviet enterprises, including to the credit of Soviet Government, fore, the Soviet Government, like all other enterprises,  also  has  its  checking  account  with  the  Gosbank,
which is the formal name of the Soviet State Bank.
Every producing enterprise and business organization is obliged to maintain its bank balance (checking account balance) with  the  State  Bank  and  to  make  all  payments  (with  the exception of minor cash rubles currency) through the bank. Thus, all taxes, including the Turn-over Taxes, all enterprise loan and
interest payments, and all other dues to the State or the Bank flow to and through  the

Gosbank — thus enabling the Gosbank to have accurate financial statistics, required to govern the Soviet State's monetary equilibrium via the interest rates, Turnover (a form of national sales tax) and other taxes.
The economic and financial nature of the funds i n i t i a l l y loaned and granted to the Soviet enterprises and the Government, all end up in checking and savings accounts at the Gosbank and its thousands of branches. Those billions and billions of ruble funds circulate in the Soviet economy as wages, profits, losses
etc. The Soviet Government and the Bank's expenditure funds function to subsidize the Soviet entrepreneurs interest and tax payments, due to the State and the Bank. Thus the Soviet enterprises statistically do not consume their own loan principals, in paying their interest and taxes to the Bank.
Once the economy is fully ruble-funded, and those ruble
funds have found their way through wages, profits and losses etc. into the checking and saving accounts of the Soviet economy — the Credit or accounting ruble-funding of the Soviet economy is maintained by the Gosbank, by routinely rolling over loans, and increasing  or  decreasing the  enterprises' loans  as  the  planned production programs require.

Some Comparison Of The Soviet
"LABOR MONETIZING" System, To
That Of The U. S. Banks'
"ASSETS AND TAXES MONETIZING" Money And Banking System:
The comparison of the Soviet "labor" monetizing money
system, to that of the U. S. commercial banks "assets and taxes" monetizing money and banking system, is based on the 1946
Soviet Embassy's Official Paper titled: "The Banking Structure of the U.S.S.R. and on the 1939 edition of: The Federal Reserve System, Its Purposes and Functions published by The Board of Governors of the Federal Reserve System;  and on the books:

Money, Banking and Credit in Eastern Europe, published 1966 by the  Federal Reserve  Bank of  New York;  and  on: The Soviet Financial  System  Its  Development  and  Relations  with  the Western  World,  published  1951  by  The  Bureau  of  Business Research,  of  The  Ohio  State  University;  and  on  the  Soviet General  Secretary  Gorbachev's  Press  Conference  in  Paris,  of October  1st,  1985  —  where  he  told  the  conference  and  TV audience, that the "Soviet State runs no deficits"; and on, over a quarter of a century, of research and study, in the Science of Money, Banking and the Credit-Money Mechanisms of history. First, the Soviet Government is the only government that has its own State Bank and its own government (rubles) money that cost the  Soviet  Government  nothing  to  use  —  and  therefore,  the Soviet Government generates no domestic government debt. The United States Government does not have a State Bank nor a money of its own, except the metal coins, from the dollar coin down to the lowly penny. And, since the U.S. Government does not have a money of its own, it (the government) must borrow its money from others, namely, from the reserve and commercial banks.  And  consequently,  due  to  the  interest  load,  the  U.S. Government  by  the  end  of  1990,  has  incurred  a  domestic Government-debt of over $3.2 trillion.
The Soviet Government's State bank, the Gosbank is "a bank of issue" just as are the Federal Reserve "Banks" in the United States, which were incorporated May 18th, 1914 as 12 private bank corporations. The Gosbank (which is the official name of the Soviet State bank) funds itself and the State's operating expenditures with newly created ruble funds. Conversely, the Federal Reserve "banks" of the United States do not fund any part of the U.S. Government operating expenditure. However, the 12 Federal Reserve banks of the U. S. do fund themselves  and  the  nation's  commercial  banks,  with  newly created dollar funds, generally referred to as "Reserve Bank Credit"

funds  —  gratuitously  pumped  into  the  "reserve  (cash    flow)
accounts" of commercial banks.
The Gosbank funding its own and the State's expenditures with newly created ruble funds — pumps new ruble funds into the Soviet economy, which ruble funds then become an addition to the circulating money volume that, was i n i t i a l l y loaned or granted to or for production and economy-developing purposes.
Conversely,  the  newly  created  Federal  Reserve  Bank Credit dollars pumped into the "reserve accounts" of the commercial banks, do not add any new money into the economy
— until the commercial banks "monetize" the "collateral assets" of the borrowing entrepreneurs and investors into new checkbook dollars, which new checkbook dollars are supported by a fraction of the Fed-provided (cash flow) reserves — which checkbook dollars then, as a second step of the Bank (checkbook) Money creating mechanism enter the economic arena money supply, as
the general public's and Government's checkbook money.
As reported in a 1966 Federal Reserve publication titled: Money, Banking & Credit in Eastern Europe, and in the 1951
Ohio State University publication titled: The Soviet Financial System And Its Relations With The Western World, the Soviet economy is based on "control by the ruble". Therefore, a surplus
of interest-free rubles not indebted to the State or to the Gosbank, accumulating in the Soviet economy through the State's and the Bank's own expenditures — would become a threat to the Bank's "control by the ruble" powers. Therefore, in order to maintain the "ruble power" of the Gosbank over the Soviet economy, the State has  enacted  or  established  certain  taxes  and  interest  rates  on
loans — all payable to the State Gosbank.
Therefore, interest on the loans to the Soviet socio- economic  enterprises  etc.,  the  Turnover  tax,  the  Income  and other taxes, are not levied and collected (as generally perceived by the western financial  logic)    to finance the State's and the

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Gosbank's operations. The interest on loans and the various taxes as stated above — are designed to withdraw out of circulation, the redundant interest-free ruble funds, generated into the econ- omy, via the State's and the Bank's own operating expenditures. Thus, with the interest charges and the calculated taxation, the Gosbank governs the Soviet economy and maintains the targeted residual and circulating monetary equilibrium in the Soviet economy.

The Fountain Heads Of Money . . .
The Soviet State's bank, the Gosbank is a bank of issue, just like the Federal Reserve banks in the United States. The Gosbank, like the Federal Reserve banks are "Fountain Heads" of New Money — but there is where the similarity ends. The Soviet Gosbank,  instead  of  monetizing  the  investors  assets  and  the taxing  powers  of  governments,  like  the  Western  banks  do  to
provide money to their governments and its the economies — the Soviet Gosbank "Monetizes the State's Physical, Technical and Intellectual Labors" by directly funding the State and all its agricultural, industrial enterprises and defense programs and targets. The Gosbank by a precise ruble-accounting procedure "Creates Credit Rubles" (checkbook rubles) to the credit of the
Soviet educational, agricultural, industrial and defense complexes checking accounts — which checking account rubles are then used by the enterprises to "Monetize (pay for) the services of labor" — which Monetized Labor Wages then become the Soviet economy's circulating ruble-money supply.
Any  nation  or  government,  whether  it  be  a  Republic,
Democracy, Socialist, Communist or a Dictatorship — if it (the nation's government itself) adopts "Monetizing of its Labor" as the source of its Credit Money — would never be financially limited in the quality of its defense, nor in what is socio- economically desirable, intellectually possible and physically feasible.    It may be

strange  to the Western  financial thought, to realize that  —  a Nation that monetizes its "Physical, Intellectual and Scientific Labors" — would never be financially limited, to landing men on other planets — but would be limited only by the technologies, arts and sciences at its command.
Not generally recognized, that in the United States, the Federal Reserve supplies the National Government with money (directly  and  indirectly)  by  monetizing  (at  high  interest  cost)
Government debt (bonds) and its taxing powers. Therefore, the socio-economic benefits, that the U.S. Government can afford to extend to the people, are limited by its taxing capability.
To the economic arena entrepreneurs and general commerce, the Fed, through the commercial banks, supplies the money by monetizing (at high interest cost) the "assets and labor"
of the productive of society. Therefore, the general economic growth of our Nation is limited — not by the inventive genius of our productive society — but by the volume of "assets" that the productive society still has left to be monetized.
When the taxing powers of Government are exhausted, and when there are no more assets of the productive society left
to be monetized — the history of ancient Greece, Rome, France of 1776, Russia of 1917 will repeat itself ... not because the people, as often recited, forgot history — but because the people had been denied the knowledge and understanding, that within "the private bankers' Asset and Taxes Monetizing business" resides  the  "seed"  of  its  own  and  its  debt-enslaved  peoples
financial and economic destruction.
The die is cast. The course is set, it's only a matter of time and the march of ancient history will repeat itself. That is why, I believe, Robert H. Hemphill, 8 years Credit Manager of The Federal Reserve Bank of Atlanta, in a statement before the House banking and Currency Committee, some time ago warned: "Our
money and banking problem is the most   important subject intelligent persons

can  investigate  and  reflect  upon.  It  is  so  important  that  our present American way of life may collapse, if our Nation's money issue is not better understood and its defects remedied soon."

THE STATES OF GUERNSEY . . . GOVERNMENT-CREDIT- CURRENCY EXPERIMENT

In the early 1900's, the Guernsey States Fathers — forced by bankrupting indebtedness to banks, and dire poverty and unemployment — against the will of bankers, the erudite professionals and economists — the Guernsey States Fathers — instead of selling bonds to banks to raise money — issued their own States of Guernsey "interest-free" Government-Credit currency  notes  and  thus  stopped  the  Guernsey  States  from drifting deeper into debt to the banks. Upon wise deliberation, the Guernsey States Fathers issue enough interest-free Government Credit currency notes to wipe out poverty and unemployment. The States planners and managers built homes for the homeless, built and rebuilt schools, colleges, roads and rebuilt the sea docks and land erosion walls — and to the chagrin of bankers and the erudite economists, the States of Guernsey incurred no additional debts to the banks. Some of the interest-free Government Credit currency notes in the State of Guernsey are still in circulation. The complete story of: The Guernsey Monetary Experiment by Olive & Jan Grubiak is available from Monetary Science book catalog, book #17. published by: Monetary Science Publishing, Box 86,    Wickliffe, OH 44092-0086

THE FEDERAL RESERVE BANK OF BOSTON, in a 1977 publication t i t l e d : The Federal Reserve,   Putting   It   Simply, writes:

"The most important thing to understand about money is that money is artificial — that is to say, that money is entirely a man-made creation. It isn't an element of nature (such as gold or silver). It is simply a creation of civilized man; it always has been and it always will  be."

It is also important to understand, that all artificial money, better  known  as  "Bank  Credit"  is  created  by  the  commercial banks, first in the form of checking account "deposit credits" — either as bank expenditures, bank loans, or bank investment monies — and most Bank Credit money remains and circulates in that deposit credits form by means of checks — until some is (temporary) converted into physical cash currency notes.
The Treasury's Engraving and Printing Bureau, tailor- prints the Federal Reserve notes cash currency for the 12 Federal Reserve banks at the cost of printing about 2c per note. The Federal Reserve banks then distribute the cash currency amongst the commercial banks by charging it    to  their  (Fed provided)
reserve accounts.
The banks then distribute the cash currency amongst the general commerce and public, by exchanging their obtained cash currency for the public's checking or saving account deposit credits. In other words, the general public gets its cash currency from banks, or from someone who got it from some bank by
having it charged, either to his checking or saving account.

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