Prof Michael Hudson was in Aust in 2009.He confronted our RBA and asked them why they are not creating the new money to equal inflation but also increases in pop + productivity.Silence was the answer.

Why are we borrowing from Global Central Banks who create in as debt in their computers.What is wrong with the RBA's computers Saul? Who should own our productivity Saul? A private group of banks or the whole of society?

The US Fed (Private group of banks) has created at least $16 trillion since 2008 and loaned it out all around the planet creating inflation here too,thus forcing up rates.This is in addition to the $14 trillion in bailouts and debt to fund phoney wars of imperialism.

Why cannot the RBA create just the inflation money of 3% which is $54 billion pa.We would not have to borrow from China for the NBN.Our monetary system is an absolute rip off.New money should not be expressed as debt by private banks.

Excellent comment Arjay.

Surely Australia should be building infrastructrure to harvest northern wet season water and an aquaduct system to run water south to headwaters of the Darling River that runs naturally all the way to the Murray.

Many existing and new rural ventures along the way, plus those down south impacted by water shortage, could suddenly have an almost guaranteed PRODUCTIVE water supply.

But the big mining revenue is being squandered for example, on an unproductive non export NBN.

P.S.

f.y.i possibility photos now posted here:

http://justgroundsonline.com/forum/topics/barnaby-joyce-water-mp-attention?xg_source=activity

Printing money is phony wealth. Leave that for Magarby and the US. Sooner or later that money has got to be taken out of circulation, or else you have one of those black holes. No wonder the question was not answered. To stop any decline in AU manufacturing you can bye Australian, seeing that is not going to happen, without a world war. China is fast out costing it self, as a cheap labour state, the shift will be on to some other developing country.

You will not face the fact that we are facing peak everything and quite soon.

There has been a global recession each time when oil has been in short supply before,
So it is inevitable it will happen again.
This will alter the whole equation when the world economy takes a beating because without China and India taking great quantities of ore, coal and gas our mining boom will go bust.
Then what are we left with? No manufacturing, no oil of our own, a huge unemployment problem and no future.
There are 95,000 new cars hitting the roads worldwide every day. It does not take a rocket scientist to work out it must take more oil than is being produced to supply just this sector.
Yes we are selling huge quantities of gas offshore but you know what? You cannot put digital dollars in a fuel tank of a diesel truck and make it go.

I think it's on the cards that Chindia's economic activity could slow dramatically, both in domestic and export markets. That will curtail their input demand from Australia. The case has been made elsewhere that high Western debt levels combined with the non-increase in energy from oil will cause a global slowdown. Increasingly there will be disquiet about Australia supplying so much coal and LNG to these countries while we are obliged to practice carbon chastity at home. We will import more and more carbon intensive goods from Chindia made with the help of Australian coal and gas. A lot of those goods could be made here.

To take one example I think it would be a mistake to lose the steel industry in Australia. It's a handy thing to have if international turmoil lies ahead. I think Australia must consider carbon tariffs and other forms of carbon leverage which we have the power to influence.

I agree generally with Saul's synopsis here.

However, it's all good and well to save for the future, but we need to spend for the future too. I would rather see money spent now on strengthening manufacturing and other industries (through infrastructure development, R&D investment etc) for future viability, rather than save it for patching these industries up later when/if resources falls over.

This is what we failed to see under Howard/Costello, who saw the political expediency of putting up consecutive Budget surpluses as being more important than long term structural reinforcement during boom years. Now we have a global economic downturn supressing the Government's ability to do what it should have been doing for the previous 10-15 years.

Further, by criticising the Labor government's stimulus package following the GFC, is Saul suggesting we go back to the old orthodox thinking that led to the Great Depression? It is accepted economic prudence to increase Government expenditure to stimulate the economy to avoid recession. Howard did the same thing during the Asian economic crisis of the 90s after all.

Thought provoking article Saul. Agree with your comments Taswegian.

Re taxing of mining I wonder why we don't have an open and honest debate on taxing the carbon emissions of trade exposed energy intensive industries such as mining and mineral processing. Under the pending legislation they will get 66-95% of their emissions free while the domestic industries have to pay. This means over 20% of emissions under the scheme go untaxed; that additional burden falls on domestic industry and power generation which will pay higher carbon prices to get the additional cuts to compensate the mining / resources' inefficiencies.

It is assumed that because such industries in other countries don't have to pay, our mines would be at a competetive disadvantage and this is reason enough for exemption.

OK so let's look at the real impost: Take a very energy intensive industry such as a gold mine, with about 25% of costs being energy, mainly diesel. A $23 carbon price on diesel means about a 6% increase. So their costs will go up .06*.25 or 1.5%. Given that their profits are 15-30% they could easily afford this.

I would assert that Australia is unique in the world in being able to afford such a tax and I think we should do it. If we don't, there is little incentive for these industries to reduce their emissions from current and planned operations; that burden will fall more to domestic industry who do pay the tax.

In WA our emissions will treble by 2050 if all planned resource extraction projects (which will be 66-95% exempt frm C price)proceed . How then would we as a nation meet a 5% reduction target? I think the resources extraction industries could do with a 'dampener' and levying the full carbon price on all their emissions is the best way to do it, even if we are the first country in the world to do so.

The economic reality is this; the US Federal Reserve since 2008 has created $ trillions to prop up the derivative bubble.Much of the share market and super funds are tied up in this lie.In addition to this,our super funds have admitted to buying US Govt bonds who in all reality have no way of repaying the $14 trillion debt which Obama has now increased by $2 trillion.

WE ARE LOOKING AT THE GREATEST ECONOMIC COLLAPSE IN ALL HISTORY IF WE DO NOT WAKE UP AND SEE WHO THE REAL CRIMINALS ARE.THIS WILL RESULT IN HUMAN SUFFERING NEVER RECORDED IN PAST OR OUR RECENT HISTORY.THE DEBT CANNOT BE REPAID BECAUSE IT IS FRAUDENT DEBT CREATED BY BANKSTERS IN THEIR COMPUTERS.

The hypocrisy of the Australian elite is revealed at any event in which ‘Aboriginal cultural Identity’ is said to be celebrated.

You, few remaining Aborigine, are not alone to get saddened

With you, hurt and insulted are the Australian men and women of good will.

In the precept “Ora et labora”, ‘ora’ stands for ‘prayer’, the humble expression of hope for a better world.

There is no humility in the Oration of Saul Eslake, only arrogance; the “I know better than thou” refrain common among Idiots.

Remember the Australian wool export industry that once supplied the nation with revenue?
Politicians and economists and the FIRB have also watched as Australia's beef export industry has been allowed to fall under foreign ownership and control, international profit shifting and all.
The Australia fishing industry is another, now maybe $2 billion in mainly finned fish product imported annually due to local inability to supply demand.
Don't let them trick you with response there is over $2 billion in fish exports because that is mainly high value lobster, abalone, pearls, high value aquculture product, and virtually no wild finned fish.
During the Great Depression many people survived of community fish and vegetable barter, not next time. Big consequences looming

For every million made trading shares, buying and selling houses or banking, someone somewhere must create that million in real work.
Real wealth does not come from nowhere, it usually involves work, innovation and adding value to existing assets.
Wealth derived from inflating assets (due to money loaned into existence) or parasitic industries such as banking and trading are effectively taxes on the real productive economy. When the parasitical sectors outgrow the real economy's capacity to support them, the rest of us "feel the pain" regardless of our own productivity.
While much of the economy is involved in acquiring wealth without creating it we have a problem!
Yes, we should tax wealth creation activities less than wealth gathering activities. We should also avoid the Nauru situation where we sell off the nations's wealth ASAP for the lowest price.
First: sustainability in housing, food, water for all. Then...free trade, futures and other financial instruments. Lets stop the financial tail wagging the productive dog.

So true Ozandy and so well said. So really true.

Essentially, for Australia to get ahead, we will have to become more insular, and return to having tariffs so that people can have work, and become self sufficient in manufacturing.
I would also scale back minining and energy production to ensure we have energy and raw materials for the future of the nation.
We must aim for self sufficiency, even if it is inefficient. We must not be reliant on the vagaries, and shifting alliances of international finance, trade and politics. Export excess, by all means. But not at the expence of the welfare of our citizens.