Prof Michael Hudson visited our RBA in 2009 and asked them why they do not create at least some of our credit. No reply. Our banks borrow at least $35 billion pa from OS banks just to service our mortgages. Our RBA could do this and limit money flows out of Aust.

The RBA could also create money for infrastructure so our Govts don't have to go into debt. With China slowing and seeking resources/energy in Africa, our economy will slow because of insufficient money and money costs nothing to produce. The biggest lie of all time, "Where's the money coming from ?"

Even our inflationary money gets created as debt. We lose out 3 times. Firstly by depreciation of our currency, then having to repay the principal and lastly the interest on the principal. Our inflationary money is $45 billion pa + interest or over $4000 for every working person. This would build a lot of debt free infrastructure like our NBN.

http://www.youtube.com/watch?v=swkq2E8mswI 'The Wonderful Wizard of Oz' by L Frank Baum had a hidden meaning that explains the GFC we that is getting worse. Wicked Witches of the West and East represented JD Rockefeller and JP Morgan the two major banking powers in the USA.

I thought you were fundamentally opposed to debt creation by fiat, Arjay?

Just one other small thing; money is only useful when it flows and insofar as it makes energy flow in the opposite direction. That is, money in the bank serves no useful purpose beyond storing capacity to do future work.

Similarly, money within the country is not useful except insofar as it enables people to get along with minimum fuss over exchanges of energy (we could do it directly - you wash my car, I mow your lawn, but it soon collapses under the weight of organisation required). It doesn't actually add to the nation's total amount of energy availability in the same way that money used outside the country does. By borrowing money overseas we are able to use it to transfer energy in and out of the country, with no reduction in our stored capacity to do work that exists in savings. If the RBA did it, then we would have to transfer some of our stored capacity every time we did business overseas and eventually our currency would be worthless for the purpose of foreign trade, although it would still be perfectly good internally.

There's no reason I can see that the value of the currency has to be equivalent inside and outside the borders. In fact, it would make some sense to have two different currencies to suit the different purposes.

Anticeptic if you viewed the link to The Secret of Oz by Bill Still http://www.youtube.com/watch?v=swkq2E8mswI you would realise that we are not against fiat money creation. It is all a matter of who creates the quantity. New money has to be created as economies expand and a select private group of individuals called banks should not have total control. If our Govts create new money as debt then we pay less tax as they don't have to borrow from private banks. What happened when we sold off 4 State Govt Banks and the Commonwealth? Up went our taxes to pay for the debt and we sold off assets to service debt.

Lee Camp on the Keiser Report gives us a good analogy. It is like a builder saying he has all this material and skilled labour but has run out of measurement,hence cannot start work. Money just a measurement but is also the medium of exchange or the oil that lubricates an engine. Our finance system has turned money into a commodity which perverts its true function. The lubricant is now more important the economic engine.

The world derivative market $700 trillion and World GDP just $70 trillion. Who created all this fiat money for the phoney derivative market? $700 trillion is $ 1 million for every person on the planet, yet most live in poverty.