Mike Keyter makes the comment that economics based on scarcity leads to war, however it is obvious he is not a student of history.
Long expensive modern wars cannot be funded by anything but a fiat monetary system.
The US went on to fiat monetary system during the civil war because the bimetallic monetary system (at the time) would not have provided sufficient funds. The Vietnam conflict triggered the need for the US to leave the Gold Standard.
I am not suggesting that wars would not occur but the whole power dynamic would change. The hawks would not only have to out argue the doves but the bankers, as to engage in major conflicts would require the unwinding of the international trade institutional frameworks. The creation of a cooperative international monetary system will beget greater international cooperation in diplomacy out of necessity.
Also he assume growth requires growth of money supply. It is obvious he does not understand the dominance of the US in the IMF and World Bank otherwise he would not have attacked the formation of a body that involves developing nations and effectively gives them equal economic power to the western economic powers.

Slasher,

I argued without much detail that a bi or tri metallic standard is deficient in its ability to fund when national interest (the prevailing interest) requires money for its purposes. You agree with this point when you state 'Long expensive modern wars cannot be funded by anything but a fiat monetary system'. May I also add here that long expensive 'anything’s' can't be funded by anything other than a fiat monetary system. We currently have a form of a fiat monetary system which I believe you support the idea of and the below is taken from Wikipedia for expediency to make my point:

http://en.wikipedia.org/wiki/Fiat_currency

I don't have a strong opinion on what form a new monetary system should take only for the reason that I can't see the current financial system changing anytime soon. Those darn vested interests…

Slasher, I'm well aware of the members of the ‘Washington Consensus’ and the imperialist tendencies those institutions have. I stated that any international monetary cooperative should be 'truly democratic' - so I don't see how the proposed cooperative in the article mimicking (from my interpretation) the current UN Security Council model could afford national equality - with ‘permanent members’ it maintains structurally a power imbalance.

To the point of growth requiring credit growth (and I ask an economist to disagree here) - credit growth has consistently exceeded nominal GDP growth, and higher debt levels to GDP ratios have also been the trend. I loosely say that this is a historical fact for the last 150 years or so.

Regards MATT

that was 50 years not 150 years

Ken

You keep claiming to refute the Austrian school of economics theory of money and credit, but it is obvious from reading what you have written that you have not read it, do not understand it, and have not refuted it.

You haven't read any original sources of Austrian economics, have you? Please answer this question.

The arguments you have put forward in this article were refuted by Ludwig von Mises in The Theory of Money and Credit 1912, and in Human Action 1948.

You can also find out why what you are saying is wrong in Murray Rothbard's What Has Government Done to Our Money? Put simply, you don't know what you are talking about. Ignorance by itself is no crime; but loudly persisting in erroneous opinions while not bothering to learn the relevant economics is.

Go ahead: refute Austrian theory, if you can. But spare us your intellectual laziness or dishonesty.

What you are in essence suggesting is nothing but a vast governmental attempt at price fixing. Like Bretton Woods, these schemes don't work, and are the occasion of vast rackets of legal theft. It is characteristic of an unfalisfiable, and therefore irrational belief system, that the more it is disproved, the more its adherents claims that fact as evidence that more of the same is the only cure. Governmental control of the money supply is in a direct conflict of interests with the rest of the population, and has a history of nothing but fraud and abuse on a massive scale. You do not address these issues, and simply argue by magic teapot economics, assuming a quantity x of superior knowledge, goodness and capacity in government that is not reality-based.

I stongly suspect Dr McKay harbours another agenda whilst spruiking his tongue in cheek " basic income " doctrine. Ever an opportunist: "..the real advantage..a healthier population which could increase production of more tradable goods etc ". How disingenuous when so many are unemployed and the Education system rewards those who wag school but are induced to progress to grade twelve just to prove to employers their abundant latent talents. Cooking the books to window dress to the World how educated we are is a sham practiced by every Academic Institution in Oz. Parents shun Govt schools to ensure their siblings are enrolled in prodigious private schools, costing a mint, deluded OP scores are a guarantee to University and a successful career. Employers are aghast at the ignorance of basic reading and writing skills of high achievers churned out by a flawed system.

Our naked Emperor, flushed with success for his economic nous in placating the chutzpah pensioners and welfare mums with his $ 10.4 B stimulus handout, is ramping up the stakes to $ 42 B cognizant his largess will leave a ' black hole ' deficit of $ 200 B future generations will be burdened with. Despite the hype and rhetoric, his Plan B stimulus will fall short in stemming the haemorrhage Aust economy is dogged with. The recession, commodity prices, faltering dollar, and lack of consumer confidence is a sure sign we have arrived at Keating's prophetic " banana and arse end of the World republic ". The May Budget will most certainly include provisions for further injections of public funds to appease an unsatiable appetite, and immortalise Kevin as Oz's greatest spend thrift PM, in our short history.

Deficits have dogged Aust ever since the end of WWII. We have spent more then we earn. Our imports have, except for two years, far exceeded our exports. With Labor at the helm over $ 100 B deficit accrued. It took Costello a decade to redeem this impost, and to create a $ 20 B surplus which was indecently frittered away in just two months. What does it

about our economic management style ? In reality 8.8 % of GDP is a whopping burden most OECD Nations would find untenable.

Narcissist Kev, always the populist is an economic charlatan with no street credibility, mush less appeal for ' battling families ' he so ardently champions. His latest give away $ 950 per child for dual incomes earning < $ 150,000 is a bit rich. It's rewarding the upper echelons of society who don't need handouts. Farmers are gratuitously given $ 950 'hardship'bonuses per person irrespective of their wealth and property size. Divisive pandering to the Nationals. For the States, pumping $ 650 M to spend as they please, preferably to shore up support in marginal seats as an election gambit. Every Oz school even the prodigious sacretarian sector will receive $ 200,000. Coupled with 500 additional science labs and language facilities. As a sweetener, he's giving $ 1600 for every household for insulation and solar panels even to landlords with investment properties. Small business are bestowed tax breaks of 33% on computers, cash registers etc.The entire stimulus plan will not only send the Nation into the red, exacerbate the inflation bogie, lead to further retrenchments and ultimately generate the kind of angst McKay eluded to.

Turnbull's Coalition is vehemently opposed to this gargantuan hoax which was insidiously rushed through Parliment in late night, early morning sittings. Together with the Independents, yesterday torpedoed the Bill, sending Kevy, no doubt into paroxyms of pique fury.

In a nutshell, the nude imposter and his cohorts will have to rehash their package to suit the occasion. We have a Global recession, times are tough with many struggling to cope. Unemployment is rife and worsening. The Business sector is running scared. The Banks are reluctant to lend, property value have plummeted. The comparisons drawn from the 30's Depression is dawning on some,and the vast majority of Aust have in one way or another reined in their credit, expenditure to suit the times.

At the end of the Day, who is outrageously out of step and living in a make belief World ?