Although this would be a good time to do it with interest rates being low,
it would also send a signal that the Fed is tightening the money supply.
This would affect the economy at a delicate time in ways that are not
desirable. Here's some numbers for you:

Right now there is:

$5 Trillon in Money Market accounts.
$8 Trillion in CD's.

What about moving a small fraction of that cash into these efforts? It's
there, but we have to make space investments look like a better place for
that money, or it will go somewhere else.

Remember, one trillion is 1,000 billion... So it's quite clear that money
supply is not an issue...

Val

Better to just print the money directly (or issue the equivalent
electronic credits).

As long as this is done in proportion to the growth of the economy,
there will be no inflation. This is the single best source of government
investment funds.

Before the American Revolution, colonies did this -- mostly
successfully. It was the ending of this practice about a decade before
the American Revolution at the request of the Bank of England (a mostly
private corporation) that led to the American revolution.
http://www.xat.org/xat/moneyhistory.html
How much has been forgotten by our society. :-( See also:
http://www.siue.edu/~rblain/usdebt.htm
http://www.prosperityuk.com/prosperity/prosperity.html

--Paul Fernhout

> Right now there is:
>
> $5 Trillon in Money Market accounts.
> $8 Trillion in CD's.
>
> What about moving a small fraction of that cash into these efforts? It's
> there, but we have to make space investments look like a better place for
> that money, or it will go somewhere else.

Note that his money you reference is not "cash". It is primarily debt
created by fractional reserve banking practices. That is, essentially,
for every real dollar put into a bank, banks can loan out about ten
dollars. See the articles here for exact details:
http://www.prosperityuk.com/prosperity/articles/article-idx.html
This money created by allowing a fractional reserve is essentially an
interest free loan of funds by the US government (and so, indirectly, by
you and me) to the banking system (which is managed by a so-called
"Federal Reserve" which is essentially a network of private corporations
with some public aspects). Then the banks turn around and loan it back
to you and me and the government at interest. Pretty sweet swindle.
Tapping this supply would, as you say, provide more than enough money
for space settlement as well as many other projects. Just takes one law...

--Paul Fernhout

>
>>Right now there is:
>>
>>$5 Trillon in Money Market accounts.
>>$8 Trillion in CD's.
>>
>>What about moving a small fraction of that cash into these efforts? It's
>>there, but we have to make space investments look like a better place for
>>that money, or it will go somewhere else.
>
> Note that his money you reference is not "cash". It is primarily debt
> created by fractional reserve banking practices.

I think my comment there may be hard to follow. Just to clarify -- here
is the debt that backs up those money market and CD funds (and some
other holdings):
http://www.bondmarkets.com/research/osdebt.shtml

Outstanding Level of Public & Private Debt (2003:Q3)
Municipal 1,883.6
Treasury 3,460.3
Mortgage-Related 5,129.4
Corporate 4,347.1
Fed Agencies 2,636.1
Money Market 2,526.0
Asset-Backed 1,680.6
Total 21,663.1

So you can see, all that positive credit you reference is offset by debt
(there are a few more positive credits that woudl make the system add
up, plus a half trillion or so of real currency and some more related
valueable items).

More details from:
http://wfhummel.cnchost.com/moneysupply.html

Currency in circulation 661
Non-bank travelers checks 7
Demand deposits 306
Other checkable deposits 307
M1 Total 1281

Savings (including MMDAs)
At banks 2322
At thrifts 834
Small time deposits
At banks 535
At thrifts 275
Retail money market funds 824
M2 Total 6071

Large time deposits
At banks 756
At thrifts 120
Institutional money market funds 1125
Repurchase agreements 508
Eurodollars 282
M3 Total 8862

M1 + M2 + M3 = 1281 + 6071 + 8862 = 16214

I'm still trying to understand what the other !$5 trillion in debt is
offset by. I think it may reflect some internal amounts the government
owes itself (Fed Agencies) as well as "M0" which is currency in bank
vaults and bank deposits at the Federal Reserve.

The banks make those debits and credits possible by loaning out ten or
more times the actual physical cash and related hard-currency-like
things they have on deposit, using a notion of only having to maintain a
"Fractional reserve".

As long as everyone doesn't try to pull out all this in "cash" the
banking system keeps merrily rolling along with all this virtual
currency just shuttling between banking computers. For example, when
someone sells a house -- the buyer (typically) takes a mortgage from one
bank, and the seller gets a check, which is deposited into another bank.
So, the money is never seen as "cash". It just moves around through
the banking network.

But, this extra twenty trillion or so "fractional reserve" dollars
underpinning the banking system is essentially US government backed
money, loaned by the US government to banks at no interest. It could be
reclaimed by law tomorrow and used to fund space settlements, SSPS, or
whatever other projects the government (and presumably We the People)
decided needed doing.

--Paul Fernhout

Hello, Paul!

I hadn't heard from you in a while. I hope all is going well!

My point in posting those figures was to show the vast sums of money that
are out there in the system, and could be invested rather quickly into space
endeavors instead of the places they currently are. Right now that money is
held in vehicles that are considered highly liquid because investors have
not regained enough confidence in the market to pu it there. This is why
many of us believe that a furthering of the boom that existed until just
recently is just around the corner, albeit to a lesser degree. At any given
time, huge sums of cash are available from any of these areas for investment
in something else. Of course, I think you and I would prefer to see this
money invested in purposes that would advance our goals of venturing into
space. Even half of one percent, an amount of almost $100 billion, is a
figure that could go a long way towards establiching a firm and permanent
presence in space.

As far as debating the ethics of fractional reserve banking practices, well,
that is certainly beyond the amount of time I have for posting. However,
this practice is better regarded as a strength, not a weakness. At the
present time it may appear frustrating to some because it isn't focused on
something that they value in an immediate way, but that is merely because of
the focus, not the inherent evil of the practice. Eliminating this or
modifying it in a significant way would have disasterous consequences.
Simply printing money to keep up with inflation would also be a very bad
idea.

To sum it up: The money is definitely out there to realize our goals, and is
in a particularly available form right now. Investors will eventually move
this liquidity back into the equity markets, VC, etc... and that presents a
very good opportunity for some enterprising types to get the necessary
capital backing that they require. To me, and probably you as well, it seems
that there isn't enough public focus on the space ideas to draw the support
that is needed. Perhaps now is the time to institute a good marketing
campaign to shine a light on the area that we feel is so important.

Here's a link to an article that shocked me because it was actually put out
on a fairly main stream and non-adventurous site:

http://www.techcentralstation.com/031004C.html

and more on the bond idea that originally sparked this discourse:

http://www.techcentralstation.com/011604B.html

Note that although my knee-jerk reaction is against issuing gov't bonds to
fund any space endeavors, the idea could certainly use a bit of
investigation... Who knows?

Val

>Date: Wed, 10 Mar 2004 15:17:48 -0500
>
> > Right now there is:
> >
> > $5 Trillon in Money Market accounts.
> > $8 Trillion in CD's.
> >
> > What about moving a small fraction of that cash into these efforts? It's
> > there, but we have to make space investments look like a better place
>for
> > that money, or it will go somewhere else.
>
>Note that his money you reference is not "cash". It is primarily debt
>created by fractional reserve banking practices. That is, essentially,
>for every real dollar put into a bank, banks can loan out about ten
>dollars. See the articles here for exact details:
> http://www.prosperityuk.com/prosperity/articles/article-idx.html
>This money created by allowing a fractional reserve is essentially an
>interest free loan of funds by the US government (and so, indirectly, by
>you and me) to the banking system (which is managed by a so-called
>"Federal Reserve" which is essentially a network of private corporations
>with some public aspects). Then the banks turn around and loan it back
>to you and me and the government at interest. Pretty sweet swindle.
>Tapping this supply would, as you say, provide more than enough money
>for space settlement as well as many other projects. Just takes one law...
>
>--Paul Fernhout
>

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