Globalisation spreads the wealth around. And inasmuch as wealth is a (very crude) proxy for freedom, we can say that it spreads freedom around too. But residents in nations which currently have a high degree of wealth and freedom are entitled to complain when some of it is exported overseas, and to prevent that if they can.

That's certainly possible in the short term, but whether it's feasible in the long term to maintain a nation with closed borders remains to be seen. Certainly the examples we have from past and present history -- early Japan, China, Albania, North Korea -- indicate that closed borders don't provide any benefits to ordinary citizens, no matter how much they may enrich the oligarchs.

Democracy is an illusion that only works well in small groups, even then there is usually one person that takes control. In dictatorships and in places like China control is by the central government and one or a small group of men. In most countries those who hold the purse strings hold the power. The central banks in Europe are the autocratic power behind the individual countries. Canberra holds the purse strings in Australia and thus to the power over the states. The media and large companies that finance the parties hold the purse strings for elections and so is the autocracy behind the government in Australia. To a certain extent this is the same in the US. When control is benevolent people will put up with minor dissatisfaction but when control is seen to be corrupt and the rights of individuals suffer individuals will begin to want change. As the world is becoming more centralised and power is in the hands of a few, the illusion of democracy will die, if it is not already dead.

If we find it acceptable that some people may control others against their will, then why should it matter who the controlling party is?

Greece might have been the birthplace of democracy - although I understand that it wasn't much like the democracy we know today - but it now appears to be run by greedy mobs which caused all Greece's problems in the first place.

As for the EU, that never stood much of a chance of being very democratic, the way it was muscled in; and we all now know that is run by faceless people, and member countries and, more Iimportantly their citizens, don't get much say.

Firstly you cant have true sovereignty without complete control over the creation of currency, and of control of your nations foreign policy.
Without these 2 things, any suggestion of democracy or sovereignty really is a joke, and we in Australia have neither.

The biggest scam played on citizens of the planet was the idea that WE NEED private central banks to create currency.
They never sent us any gold or anything of value.
They created currency out of almost worthless pieces of paper and plastic, and we pay them interest on bonds off the backs of ours and our childrens hard labours.

Think about it.
If I print up a billion dollars on my home printer and lend it to you at face value with 1% interest, then you owe me 1 billion dollars + 10 million interest.

Even if you manage to gather up ever single piece of currency in the country and pay it all back, you still owe 10 million dollars.

That 10 million can never be paid.
The money doesnt exist.
It was never in circulation.
And its subject to the effects of compound interest.

The only way to get that money is by exports and of finding a way to profit from trade with other nations.
How the hell can every single country do that?
Someone has to lose out.

The system is flawed, but flawed by design, to enslave nations.

What do you think democracy does for these private bankers who now have all this free money at their disposal?

Well they are now free under democracy to buy out our nations infrastructure and wealth WITH OUR OWN MONEY.

Democracy is one big sham.
We need to start putting them (politicians) in jail when they do the wrong thing.
Start with Bronwyn Bishop - for stealing taxpayers money for helicopter riders to go to party fundraisers.
If politicians don't have to obey the law why should anyone else?

And we need to start educating people properly instead of feeding them cute cat videos and Bruce Jenners.

Armchair we've discussed this before, but you seem to have developed amnesia. Australia is financially sovereign. We own 100% of the RBA (our central bank). The USA is the only major country, indeed probably the only country in the world, to still have any private central bankers. Linking to any website listing central banks and claiming the Rothschilds own them is evidence of nothing other than your gullibility.

Money paid in interest remains in circulation.

More money can be created at any time by borrowing it into circulation. Interest rates discourage this; higher interest rates discourage it more. This is useful because to control inflation we have to have some way of limiting the amount of money in circulation.

Australia also has control of our own foreign policy, although sometimes our politicians have ignored this and just aligned ourselves with the USA.

Jon,
I thinks its somewhat incorrect and misleading to say that globalism spreads the wealth around.

In truth it spreads the wealth around at the top of the financial food chain.

The people at the bottom are lucky if they get any benefit at all - maybe some employment.

And the multi national corporations ultimately take the peoples wealth out of the country.

They take the notes and leave us with the shrapnel!

The concept of spreading the wealth around needs to occur from the bottom, not the top.
- To empower and enrich individuals at the local level and then see that money work its way through the economy to the top.
(And to have that money put back to recirculate within the system when it reaches the top)

Not work from the top down as if we should all fight over a rich person who is throwing gold coins from a balcony and who takes the majority of his wealth with him when he gets on a plane.

I think Keynesian economics (The eternal battle between the spenders and savers) is stupid as well.

All that means is when the big boys mess up and ruin the economy they blame us who are now poor for not spending money during times of economic uncertainty.

Again the system is flawed.

They say its our fault for not stimulating the economy when it was their monetary and fiscal policy initiatives that put us in the position in the first place.

In any case (by saying globalism spreads the wealth around) you are trying to put a band-aid on a huge open wound.

The huge open wound was allowing private central banks to issue the public currency (paper and plastic) at a loan with interest in the first place.

Aiden,

No nation in debt to foreigners is sovereign.

I admit I'm not well versed on all things economic.
But I don't need to be intelligent to know that if its not in your wallet you cant afford it.

My problem isn't with ownership of the RBA.

Its with a system that creates currency from nothing and charges us interest for it.

What are we paying interest on?
What did they loan us?
Bits of plastic?

That money is worth no more than the contents of my recycle bin.

Why can't we print our own money and stop paying interest on the entire currency?

Why must we be funded on debt that's created from worthless bits of plastic?

Why must we be debt slaves for nothing?

Thats my point.

And heres another point about the RBA Aiden,
Even if you are right and we own the RBA, if I own a company that owes 700 billion then I don't actually own anything except a liability.

I share some of Richard'’s concerns, but he misses some important points. Greeks had every right to vote for an end to austerity, and could even have defaulted on their debts. But they would have to wear the consequences – an end to membership of the eurozone; a worthless credit rating with no-one willing to lend them more money; and, in the short term at least, a spectacular financial collapse.

In fact, the Greek vote probably contributed to the hard line take by Greece’s creditors. It was interpreted as voting themselves a share of someone else’s taxes; and it showed that, whatever reforms the Greek government agreed to, the population would not support them. Hence the need for a privatisation fund to try to protect against yet another failure to implement agreed changes.

I agree, though, that the Eurozone exemplifies some of the tensions between sovereignty and participating in transnational institutions.

For a single currency to work requires not just a single centralised monetary authority but also consistent and fairly conservative fiscal policy. To deliver the latter requires surrendering some sovereignty, which is one of the reasons the UK never joined. If people join the club but refuse to obey the rules, the club falls apart, which is why the other EZ members tried so hard to keep Greece in the tent.

The other thing that has become clear from the Greek debacle is that the rules are loaded and applied inconsistently. Many EZ members, including France and Germany, have at times run fiscal policies that bent the rules, but suffered no penalty. Countries that borrow stupidly suffer more than bankers who lend stupidly. The EU’s own rules on bailouts were breached. And the façade of independence of institutions such as the ECB was laid bare – it was politicians, not bankers, that negotiated the final deal.

But that is no reason to avoid international agreements that bind members. From tariffs to climate change, many issues can only be resolved through international agreements that bind signatories. Sometimes, the benefits make the loss of sovereignty worthwhile.

Armchair Critic says "If I print up a billion dollars on my home printer and lend it to you at face value with 1% interest, then you owe me 1 billion dollars + 10 million interest.
Even if you manage to gather up ever single piece of currency in the country and pay it all back, you still owe 10 million dollars.
That 10 million can never be paid."

This is a common misconception among many people, recited throughout the web. What people who blindly repeat this falsehood don't understand is that the interest on some loans cancel each other.

To demonstrate that it is wrong consider this following hypothetical situation:
Image that Alice has a $30,000 and a stand of trees while Ben has an axe but no money. Alice wants to sell the trees because they ready for harvesting. Ben wants to buy the trees so that he can make timber and firewood to sell. Alice wants some timber to build her house.
So, Ben borrows $30,000 from Alice to be repaid at the end of the month with 10% interest (secured against his house). Ben then buys the trees from Alice for $30,000. Ben chops the trees into timber and firewood. Alice wishes to buy $33,000 worth of timber so she pays Ben $30,000 cash and agreement to pay the extra $3,000 at the end of the month (effectively she is borrowing $3,000 from Ben). At the end of the month Ben pays Alice $30,000 and they agree that the two debts of $3,000 cancel each other and that everything has been made good, ie: there is no debt remaining to anyone at all.

-- continue below --

-- continued from above ---

We see in this example that the interest on the two loans cancel each other. Now, this was a very simple hypothetical situation with just two protagonists, whereas in the real world other entities are involved, eg: banks. However, the same thing happens, that is, interest from various loans cancels each other and is destroyed. This occurs because the banks maintain their capital reserves by borrowing from each other and when they settle these interbank loans they cancel the amounts that each owes to the other (these amounts include some interest) to determine who actually owes what to whom.
So in summary, contrary to what "Armchair Critic" and many other claim, money created by lending and interest is routinely destroyed by the banking system.

Armchair Critic,

Australia is sovereign. The fact that a few foreigners have decided to buy our bonds doesn't change that.

Australia has unlimited credit. Literally! Even if our debt were a thousand per cent of GDP, there would be zero risk of being unable to repay it. (This only applies to debt in Australian dollars, but the Australian government does not borrow in other currencies).

Australia could print all the money it wants, without issuing debt. But that would ultimately have the same effect: interest would still be paid on the money that's entered the economy, but instead of bonds it would be paid on reserves that commercial banks hold with the RBA. Unless we had a zero interest rate policy, but to sustain a ZIRP across the economic cycle we'd need very high taxation or else we'd end up with very high inflation.

Debt is created not from plastic but from the ability of banks to lend profitably. And the value of money is based partly on the need to use it to pay debts, and partly on the need to use it to pay taxes.

The RBA is profitable most of the time, and doesn't owe what it can't print. But to control inflation, we need to do something to limit the amount of money that banks can lend profitably.

Aidan
That's just more of the standard statist fantasy that real wealth - houses, trucks, roads - comes from printing pieces of paper with special state-monopoly squiggles on it.

It doesn't.

And it doesn't matter how many frauds or fools think or claim it does, nor how big their hat is.

It still doesn't.

Real wealth always only ever comes from productive activity.

The fact that you can't understand the difference between gross and net, is what explains your mistaken doctrine.

On the contrary, Jardine. I'm well aware that real wealth comes from productive activity, and have never claimed otherwise. But Armchair was concerned about money, debt and sovereignty, so I explained why those concerns weren't valid.

What gave you the delusion that I can't understand the difference between gross and net?

The fact you've failed to notice the relationship between money and productive activity, is what explains your mistaken doctrine.

Don't be silly Richard, it has nothing to do with democracy or any6 other high ideals.

The Greeks have been having a right royal; party on the credit card. They have maxed out a number of times, extending the limit to keep on partying.

Now the lenders can see there is no chance of the partying Greeks being able to pay their debts, & won't extend the limit again, unless the Greeks stop partying.

I have no idea how money wise you may be, but it doesn't require an Einstein to see that lending money to partying Greeks, or Ozzies for that matter, is a bad idea. Only a fool would lend them more money if they won't start doing a bit of hard graft, & start trimming their cloth to suit their income.

You should be shouting the facts to all Ozzies, for if we continue as we are, it won't be long before we are in the same boat. The stupidity of the welfare state will get us all in the not too far distant future, if we don't wake up top ourselves. Democracy has nothing to do with it, except that political parties buying votes with handouts is ultimately disastrous.

Well I'm confused and I'm not to proud or lacking of humility that I wont admit it.
I'm not an expert on financial matters and its more of my questions and lack of knowledge that lead me to make the statements I do.

I don't understand why we pay interest on plastic that can come out of a recycle bin.

And I don't understand how interest on bonds for currency could be cancelled out.
I'm not aware that we lend the banks anything.

If the private central banks sent us a shipment of gold (something of real worth) as a real value backing for their worthless plastic, then you would have something physical to justify the bond payments and interest on.

Why are we paying interest on plastic money that has no more real value than that of my recycle bin?

I need to learn more about this stuff I really don't think I get it.

Regarding democracy..
I'm always quick to say that our democracy isn't real democracy, for various reasons.
I wondered this morning whether or not it would it be any less democratic if for example we gave adult voters 1 vote for every year they were an Australian adult, plus an extra vote if you were born in the country?

A person of 68yrs would get 50 votes, 51 if he was born here, whilst someone of 18yrs would only get 1 vote, 2 if they were born here.

Now I'm not saying I advocate this idea, just that I thought about it.

Would it be any less democratic to say that older Australians with the wisdom of seeing the country change over the years have better insight than an 18yo ?
Or that people who have lived here their whole lives shouldn't have more of a say than people who have only been here 5 minutes?
Or that people born here should have more of a say than those who were not?

The outcomes of elections would no doubt be completely different but would it not still be democratic?

Just random thoughts...

Dear Critic,

The whole idea of democracy is ridiculous, as arbitrary as any other regime. Some justify democracy on the grounds that it is meant as a protection against harassment by the state - but can democracy actually protect individuals and minorities? What right has a group of people calling themselves "state" to harass others to begin with?

When a group of people combines voluntarily, they may adopt whatever methods of decision among them as they like, including democracy and all its variations, but since states are not voluntary, democracy is nonsense.

Still, if you want one obvious improvement over the current system and in the direction of the ideas you presented above, then that would be to count only those who have something to say and want to say it, as opposed to donkeys who only cast a vote to avoid a fine. While still noxious, this would provide slightly better protections for those who suffer most at the decrees of the state.

Armchair, being confused is no excuse for reverting to the false assumption that central banks are privately owned.

The value of plastic is unrelated to the value of money.

Interest paid cancels out interest received.

We lend the banks money, even if you're not aware of it.
However, even if we weren't, a change in the amount the banks were lending us would have the same effect.

Governments should not waste scarce resources acquiring gold.

As for the idea of giving older people more votes, the misinformation they believe wrecks the theoretical case for it. Younger people have a bigger stake in Australia's future. And in practice if we'd had that kind of weighting, Australia would've been subject to racist laws much longer.

__________________________________________________________________________________

Hasbeen, Greece has limited credit; Australia has unlimited credit.
As long as we only borrow in the currency that we print, we're immune from their problems.

__________________________________________________________________________________

Yuyutsu, if you're unsure of the benefits of having a state, you only have to look at the places that don't: they're all violent and nobody is safe.

Dear Aidan,

I was not discussing the benefits or otherwise of having a state.

Lets assume for argument-sake that such benefits exists, then what?
Does it justify the harassment of innocent people who happen to live on God's blessed land and ordering them to follow your laws or else?

This is a simple moral question: Do the ends justify the means, especially violent means?

- My answer is clearly 'No'.

How more so when the same legitimate ends (personal safety) can be achieved by less violent means?

Armchair,
Our money is backed by something and it's not the intrinsic value of the metal and plastic of our currency. What backs our money is society's collective promises regarding future payments.

Promises and our reliability to fulfil them back the whole of a functioning society in general. Eg, my local Coles down the street has a sign on the door telling me that they will open at 8:30 on weekdays, I regularly rely on this promise when I go there at opening time to get milk for breakfast. My faith in this promise they made allows me to confidently spend my time and energy to go there with the belief that I will be able to make a purchase. The vast majority of interactions that you have with people and entities relies on micro-promises like this, ie. social interactions are backed by promises (eg: a b.y.o barbeque is backed by promises-- invitees make promises to be there and bring their own drinks the while the host promises to supply food and entertainment). These promises can be said to have real wealth: it's total value is our functioning society.

So, it should be no real surprise that promises can also be directly used to back our money. When you take out a loan you are promising to pay it back at a later date. Our collective ability to pay our banks loans is what backs our currency, ie: our ability to fulfil our financial promises. So even though banks create this money out of "nothing" it is backed by something that is real, all-be-it intangible. Our money is not backed by some make believe fairy-dust enabled fantasy.

Yuyutsu,

Do you really think anyone would be better off if there were loads of outlaws around? Because that's what answering NO amounts to.

There should be restrictions on what laws the state can impose, and in what circumstances it can use violence (as I've previously stated, I think it should be restricted to self defence or the defence of others). But the law must apply to everyone, otherwise it won't be much use for protecting anyone.

Dear Aidan,

Had there been no laws, then there couldn't also be any outlaws!

But I do assume to understand what you actually mean by "outlaws": rascals, murderers, rapists, thugs, thieves, fraudsters, etc., yet one doesn't need to become like them in order to beat them.

Having a state and making laws is an overkill and is commonly used to fulfil other ambitions, other than mutual protection. Nothing of course is wrong when people combine voluntarily to forward their ambitions, but that currently is not the case.

Yes, society needs to protect its members against the above kind of people, so by all means, if necessary they should be sent to Hades in order to prevent them from doing any further harm - but no legislation, lawyers and formal courts are necessary for that which is natural and common-sense beyond doubt. It is simply not justified to inflict laws on innocent people and forcing even those who for whatever reason are not interested (yet committed no crime) into becoming members of a state.

Dear Yuyutsu,

I mean "outlaws" in the original sense: people outside the protection of the law.
With nothing to lose, you could expect them to be armed and very dangerous.

Without legislation to tell people what they should avoid doing, and without formal courts to decide what is beyond doubt, it's a safe bet that innocent people would often get lynched. Having laws is a far more civilised alternative.

You don't have to become a member of a state – just being on its territory is sufficient to be subject to its laws until you leave its territory.

Dear Aidan,

People who are outside the protection of the law (if even there is any law) are not necessarily dangerous - the only difference between them and you is that either they have not asked your particular group of people to protect them, or they did ask but that protection was refused. Perhaps they made different arrangements to protect themselves, or perhaps they prefer to turn their other cheek - nothing is wrong either way. On the other hand, even dangerous people are currently [and wrongly] protected by the law, thus there is no obvious relationship between dangerousness and being protected by laws.

Of course if someone is dangerous, then you take the necessary steps to defend yourself, your family and your group(s) against them - that's common sense.

Why would innocent people be lynched if they freely select such a group of people who agree to protect each other? After all, they wouldn't have selected that group had they not been convinced that it can protect them effectively! Laws are bad because they bypass common sense and innocent people can be trapped and punished for victimless technical breaches, while others who are dangerous and actually cause harm, cannot be removed from society due to other technicalities.

Becoming subject to laws for the sole reason of living in a particular land-area is monstrous - and the larger that land, the more monstrous it is. A person who harms nobody should not be subject to any laws and should not be told to leave their natural habitat just because some other people who call themselves "state" desire to control vast areas of land. Territories to not belong to states - they belong to the people (and other animals) who rightfully live on them.