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The Forum > Article Comments > Which bank could give Australians a better bang for their buck? The RBA > Comments

Which bank could give Australians a better bang for their buck? The RBA : Comments

By Nicholas Gruen, published 17/10/2017

When it comes to banking and superannuation, competitive neutrality should include government competition against the private sector.

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Agree and would want to take it far further!

Simply put, even though the world is changing, the fundamentals of success hardly ever do!

Here's the thing, if we are going to reinvest in coal fired power? Lets not do it by halves, but go the whole hog?

Adani have been exposed by four corners, as not fit and proper to run anything!?

With them out of the way?

We could using the source of funding you've indicated, to build a great big coal fired power station adjacent to that great big coal seam?

The four foreign hedge funds that effectively own the "big four", might tremble with barely suppressed rage, at the thought of being excluded from this and several other cash cow projects, still on the drawing board!

8.5 billion might be enough for the power station? A similar amount would get a state owned and operated open cut coal mine up and fully productive And a almost guaranteed lifetime supply for a 4,000 M.W. power station, which could sell power to the southern states as peak load power?

This would ensure financial feasibility for the life of the project!

We could call it, Abbot's folly?

And let him claim all the glory and kudos!

The workers could be employed as contractors on income sharing arrangements for a fixed share of the profits?

So as to eliminate strikes and trouble makers? And allow them to minimise tax and write off vehicles etc, as applicable to their business expenses costs?

The only thing that could cruel it is the probable punitive carbon tariffs other nations could apply to our exports?

Particularly as the adults in the room go completely nuclear and for no other reason than lower comparative energy costs, and or safer cleaner power!

We can't go nuclear, because we have government imposed regulations that prevent it and no government currently polishing treasury leather is ever going to change them!

NEVER EVER! DIE IN A DITCH FIRST!

No matter how cogent and compelling the case or supporting evidence, or a bigger better bang for our buck!
Alan B.
Posted by Alan B., Tuesday, 17 October 2017 9:57:32 AM
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Afterthought.
Indonesia, one of many nations that include South Africa, has reportedly, committed itself to a nuclear D+R program, based around, molten salt thorium reactors?

And where better to invest our money? The bigger bang pun not able to be included, given thorium is fertile not fissile and therefore cannot be compressed to create a thermonuclear explosion!

That said, it is technically possible to use some of the products of neutron assisted thorium fission, to create an atomic bomb. But impossible without advanced robotics!

How far advanced are Indonesia with robotics? Homegrown or imported? Alan B.
Posted by Alan B., Tuesday, 17 October 2017 11:28:44 AM
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The author seems not to understand the difference between wholesale and retail. The dairy buys milk from the farmers at less than 10c/l yet the cheapest price at the supermarket is $1. The difference is the savings from bulk buying and the costs of packaging and distributing the small amounts of milk to customers.

The banks get most of their money from customers deposits, not from the RBA which is a banker of last resort and typically gives large short-term low-risk loans to banks where the banks have to build and run branches, dish out relatively small loans at a far higher risk.
Posted by Shadow Minister, Tuesday, 17 October 2017 11:37:13 AM
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Wholesale funding, with our money from our bank, for industrial, income earning projects?

Doesn't seem to have any flaws, except if you're a foreign hedge fund/national bank with a presumably captive market/safe as houses bets.

Doled out, minimal risk loans, being the operative word!

And with other people's money! And earning commissions all the way to the bank! Clearly, the obvious pun was intended. And great work if you can get it!?

Why bother if you can join an appropriate credit union, get a better deal and in the knowledge and comfort, your money will stay here going around and around, building/building/assisting other Aussies/Aussie endeavor/innovation!
Alan B.
Posted by Alan B., Tuesday, 17 October 2017 1:27:49 PM
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Shadow,
Of course the author understands the difference between wholesale and retail. His point is that when retailers have such a big markup, it's inefficient, and one obvious way to address that inefficiency is for the wholesalers to move into retail. As I'm sure a lot of dairy farmers would if the farm gate price were under 10c/l, though AIUI the real price is four to six times that (varying by region, and higher in the north).

However, I disagree with his conclusion. Unless a substantial broad based land tax is introduced, cheaper mortgages would just increase land prices and ultimately we wouldn't be any better off. And making housing relatively cheaper than business loans will make our businesses less competitive - particularly if the RBA raises interest rates to try and tame that housing bubble.
Posted by Aidan, Tuesday, 17 October 2017 1:47:37 PM
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Shadow,

The banks create money by lending it's all set out on the Bank of England website. Those loaned funds find their way back into deposits.
Posted by Nicholas Gruen, Tuesday, 17 October 2017 6:06:25 PM
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