debt burden. Hyperinflation @ 24,000 %. His printing presses are working overtime to curb his tastes and excesses.

The amount of new money created each year is very large and is rapidly increasing. Only the RBA cam approve Banks from lending money which are not depositors funds. All the money lent by one member Bank is deposited an another Bank, which has the effect of keeping all in the family of clearing Banks. The RBA resorts to a variety of fiscal controls on the creation of Bank money to almost complete dependence on varying the interest rates. Even though it targets the CPI as a measure of inflation, in reality, it is neither a measure of rates of inflation, nor is it much affective against rising interest rates.

It's a disingenuous ploy to reduce Veteran's / Old age Pensions, welfare spending, tax cuts, wage rises, compensation claims, and perceived Govt largess. It taketh with one hand, and not necessarily giveth with the other.

Anyone - even blind Freddy, can see that the AUD is 1/12th it's value today, and buys as much.

Further reading: http://www.legalforgery.com.

I had a computer problem when the article was published.

The NZ address provided by Pericles on money creation was inferior to the Paul Samuelson text I used in Economics 1.01 forty years ago. The summary of my education for the OLO records was only partial. For example, at the Australian Administrative Staff College (Advanced Course 45), my paper on tariffs and trade was considered the best they had had to that date.

Tell me how any employer avoids including in the cost of production all taxes paid. To the cost the employer has to add a margin. So the consumer price includes all taxes paid by the employer and any employer, particularly a manufacturer, competing agains imports from a low wage cost or low tax country is at a distinct disadvantage. My argument is that exporting depleting capital assets (iron ore and coal)to fund consumption is not a sensible way to run an economy for the longer term. In the longer term a manufacturing industry is essential.

If Australia earnes more $US from exports than it spends on imports the surplus pays off debt or buys an overseas asset. A $US cannot be spent in Australia. Banks have been borrowing $US to provide the Tier 1 backup which funded speculation and investment to take advantage of negative gearing in the Australian housing market and consequently forcing wage earners out of the housing market. The $US borrowed never actually come to Australia.

Dalma states that the $US is the only worthwhile trading currency. If so, why has the USA currency devalued so substantially over the last 30 years in relation to the Yen, the Mark and even the $A. In about 1973 the AFR carried a series by Neil McInnes titled "What do we do with all these worthless American Dollars?" The Basle Agreements have just pushed back the day of reckoning and even the latest round does not fix the international trading problems.