Hi sam.

Apparently missing from all your links is the answer to the most important question - what is the origin of money? How is it created? Who or what brings it into being?

It is easy to struggle with this concept due to the abstract nature of money. It exists, but not in a physical sense.

Imagine the world is a village inhabited by you, me and all. The total sum of currency circulating aound this village is $100. 5 years later, things have changed. There are more chickens, pigs, an extra milking cow and a new barn. You, as the blacksmith now have more tools, a second forge and make and sell more usefull items and trinkets to me. I in turn as the farmer, sell you more milk and meat from my expanded heard and flock. In order to accomadate this increased exchange of increased volume of goods and services, the total sum of currency circulating the village is now $200.

We note this fact and then go on our merry way, never giving it a second thought.

So how did this increased numerical amount of money just "appear"? If EVERYONE has to earn or borrow before they can spend, how is it possible for the fixed amount to change (and where did the original sum come from in the first place)? Did the dollar bills sneak off and do something while we weren't watching?

The answer is that all is the sovereign. He alone is empowered to create new currency, to increase what would otherwise be a fixed amount. Through his steadily increasing spending as he buys more of what you and I produce, new net money has entered the economy. He did not need to tax us or borrow from us in order to spend what he can simply create.

The link about tax paying for government spending applies only to state governments, who are not sovereign. It does not apply to the sovereign. Please post an alternative explanation if you have one <word limit>

fozz wrote 'what is the origin of money? How is it created? Who or what brings it into being?'...

actually information in those links, but Ill try my best...

your village example is correct, and theoretically the village 'reserve-bank' will keep track of total value of village assets(chicken, cow, pig and potatoes), and ensure total 'money'(legal tender) it prints be of same 'total' value and keep pace with real increase or decrease...(what I refer to as 'real_assets', ie excludes loans\debts ie 'in-the-air assetss)...

when currency value linked to each country gold reserves, currency was stable(gold_reserve_economics), till 1970's when de-linked(do google on the architects behind this market destabilization that was one of the original errors leading to current crisis...)

since, who know, how know, who does about total country asset in real time(but debt/loan included in this, so can see how large toxic loans mess up the bottom line, in other words there is excess world currency circulating at the moment...meaning, yep and dont ask for details)...on this the total currency in circulation is set by each countries reserve banks and money printed or removed...

the relative currency value between countries(poundVfrancs)set by buy/sell market forces...based on even more hocus pocus...discover huge oil fields off tasmania, wall street sees it dramatic increase in 'total_asset' and Australian currency value takes-off up...

so taking Zimbabwe, inflation exceeding 1000%, loaf of bread zim$100,000(reserve bank printing crazy amounts of paper money)...same loaf in Australia $3.00... when loaf zim$1.00 some 20 years back(yeah, been there), so what happened?...buy/sell forces drops zim$ value...so for Aus$3.00 you can buy 100 loafs of bread($300worth) in zimbabwe(and can export back to Australia for a jackpot profit...see the problem)...so zim reserve banks over-values its total assets(saying bread actually Aus$300)...so can print more, but wall street says 'nah, thats fraud'(de-linking needed total-asset_currency-value co-link for current market to work) so devalues currency futher...and on...Zimbabwe can fix this by delinking export/import from zim$, say use Aus$ value...so local Zimbabwean will pay Zim$1.00, but world buys zimbabwean bread at Aus$3.00...see...

sam
Ps~'sovereign'...time when monarchy ruled, yeah blue-veined-by-birth-right-and-god-caste-system time, they determined 'currency', not now...

The Templars invented the banking system - which opperated on Ethics and Honour. Something not common with Government and departments.

Money hmmmmm; This will answer the question- Solipsism exclude.

http://majorityrights.com/index.php/forums/viewthread/22/

Good. So you understand that the sovereign ( I'll use the term "currency monopolist" if you'd prefer) is the ultimate source of the medium of exchange and it alone is empowered to create or extinguish it.

When it taxes, it does not physically collect any money, it simply extinguishes that sum. The reserve itself is always issuing notes and coins to meet our circulation requirements but this is seperate from the process I am talking about.

You'll understand that talk of deficit spending now creating large future debt might be true if you or I anyone else were doing the borrowing (and the fed are not borrowing), but not when it is the currency monopolist because terms such as "debt" and "savings are largely irrelivent to them, owing to their unique powers.

The only way that the absolute amount of currency can possibly increase is when the currency monopolist spends. But if they feel the ideological need to keep running up ever larger surpluses when there is no need, then they are taxing more than they are spending and witholding currency from circulation. They are reducing the net sum availiable in the economy. The only way for the private sector to then finance economic expansion is to keep borrowing. But this must be repaid plus interest and for each dollar of private debt, there is a corresponding liability. It ultimately cannot supply the net increase needed to facilitate a steadily growing economy. To rely on this alone to fuel growth is unsustainable in the long run.

For this reason, the federal government must run small defecits to ensure stable, long term growth. We are so conditioned to think of the federal budget as functioning exactly like our household budgets that we react in horror at the prospect of this, not realizing that a federal defecit equalls the ability for the private sector to accrue surplus.

OK, so Rudd is far from perfect.
Conroy must go, as must all who support secret censorship.
Cash handouts are too blunt an instrument, and wasteful.
Infrastructure spending is what we need: Rail, road, housing (factory built, not bespoked). We need more R&D...particularly the Development bit which Australia is so bad at.
We cannot continue being a mine, a bank and a tourist resort if we are to remain an independent country...we must make things that count: Energy, medicine, factories, food, housing, clothing, gadgets, and last but not least knowledge. Oh, and a free media.
Finally, if the Right is serious about regaining government (I believe they will wait until the next cycle again. Easy to make silly associations that the press and "informed commenters" can run with), they need to sort themselves out. Get rid of the extremists and you will breeze in the next election. Recessions are hard on governments: the mud sticks. What is most important is that the opposition are competant when the population next does a flip-flop.

fozz, sorry but get out of the comfort of your deep well, climb out to top and look at the world as it really is...warts and all...otherwise yeah for a while youll be comforted by fact your well safe and going per usual...then one day...bang...and you are in extreme survival mode...so better deal with 'stitch in time' or 9billion stitches needed when almighty rip from unceasing relief of building pressure...there are real problems affecting us all here...like...

for example http://www.reuters.com/article/newsOne/idUSTRE53537D20090406?sp=true

exerpts...'Healing the banking system(US), which is "basically insolvent," and housing markets is crucial to recovery, Soros said...'U.S. dollar is under selling pressure and one day could be replaced as a world reserve currency, possibly by the International Monetary Fund's Special Drawing Rights, a currency basket comprising dollars, euros, yen and sterling'(yep, fatcats want the buy\sell money-market-gravy-train going on)...'Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end.'....

and others say... http://www.theinternationalforecaster.com/International_Forecaster_Weekly/World_Financial_System_In_A_State_Of_Insolvency
http://www.forbes.com/2009/03/04/global-recession-insolvent-opinions-columnists-roubini-economy.html

otherwise I foresee that you will be also named 'froggy' till you climb out into the light...

sam