Puru Saxena 25 September 2010 On Line Opinion

Thank you for your contribution.

I could not but note an old man at a market picking an orange and delicately replacing it, repeating this ritual with other costly items and finally buying a quarter of a cabbage.

On his way out I saw that he was the ex local tailor.

I saluted him and in the chat ensued he said that he had saved all his life to avoid the indignity of the dole but, he added, “I do not know how long I can avoid it, as my money buys less and less”.

I could understand him deeply. My contribution to the wealth of the nation was of another kind.

I cleaned toilets at one of the major rail stations in town and now cannot escape the bitter experience of the old tailor.

You, Puru Saxena, will not go through a similar experience. The line that separates the robbed from the robbers has you on one side, the tailor with me on the other.

And much that we would like, there is no point in questioning the robbers for the very explicable loss in the purchasing power of my and my friend’ savings.

The bankers and stock exchange gamblers, will undeterred continue to fumble with the wealth of the nation

Puru Saxena 25 September 2010 On Line Opinion

Thank you for your contribution.

I could not but note an old man at a market picking an orange and delicately replacing it, repeating this ritual with other costly items and finally buying a quarter of a cabbage.

On his way out I saw that he was the ex local tailor.

I saluted him and in the chat ensued he said that he had saved all his life to avoid the indignity of the dole but, he added, “I do not know how long I can avoid it, as my money buys less and less”.

I could understand him deeply. My contribution to the wealth of the nation was of another kind.

I cleaned toilets at one of the major rail stations in town and now cannot escape the bitter experience of the old tailor.

You, Puru Saxena, will not go through a similar experience. The line that separates the robbed from the robbers has you on one side, the tailor with me on the other.

And much that we would like, there is no point in questioning the robbers for the very explicable loss in the purchasing power of my and my friend’s savings.

The bankers and stock exchange gamblers, will undeterred continue to fumble with the wealth of the nation

For many years people have noticed that increases in interest rates effect people differently, some not at all. Business whatever their circumstances may claim the increase as a tax deduction, and possibly render it harmless to them. Many people with home mortgages, credit cards, personal loans etc have to accept the rate rise into their affairs as best they can. In many cases this is disasterous, or at best horrible.
That interest rate increase, although applied to supposedly curb the money increase by putting the breaks on bank lending, actually transfers money from those who can least afford it to highly profitable banks.
If banks through creating credit have a role in the increase of the money supply, then that increase can be curbed by restricting the ability of the banks to lend, not by castrating many of their borrowers.
Australian trading banks are no longer fettered by the "fractional reserve banking regulation", apparently they can lend $20.00 for every dollar of asset they own. They could lend $12.00 of that to industry, only after lending $12.00 to housing.
This could be why so many non-bank, non-deposit takers opened up as home mortgage suppliers.
Within those terms it is worth noting that loans are assets to banks.
The RBA needs to be reinvented as the Australian Reserve Bank, and used for the betterment of Australia, not as bookkeeper for a foreign debt that cannot be paid, or as an excuse that empowers private banks to act as tax collectors when introducing compulsion on citizens to pay them money that rightfully must go to the ATO.
An Australian Reserve Bank using the value of our country could issue credit to our Federal Government for any good purpose, and at minimal interest. Is that blind utopianism, or just anti-greed.
In the News Weekly July 25th, 2009, are two very important articles. Six economists renew call for a 'people's bank', by Patrick J Burne.
The other, "Rebuilding a functioning financial system", by Colin Teese.
The book is "Debt and Delusion: Central Bank Follies that Threaten Economic Disaster". Author is Peter Wharburton. (Penguin 1999).

I don't think anyone could reasonably deny the disaster that is inflation. The example of the oranges is however incomplete.
Provided the incomes of the orange buyers is also multiplied by the same factor, it doesn't really matter how many zeroes there are, -at least until that economy is compared to, or forced to compete with, another.
The problem with expanding the monetary base of any nation, is what the extra money is used for. If it increases real productivity, (creates more oranges) there isn't really much of a problem. If however, the extra money is used to pay off bankers and speculators debts, and consequently widen the already egregious gap between rich and poor, then obviously there is a problem.
Douglas Adams, in his 'Hitchhikers Guide to the Galaxy' trilogy (of four books) pointed the way out of this dilemma. What we need to do is colonise another planet.
First we build a great big space ship. The first people we send out to start the colony must be the most useful, and highly paid and productive, such as:
used car and real estate salespeople,
politicians and bureaucrats
bankers, money managers, financial advisors and speculators
accountants and lawyers, etc. etc. etc.
Once these useful people have established the new colony, the rest of us can rush to join them...
I think we could call it the Botany Bay Solution.
Benito, I agree.

Benito you are 100% correct."the RBA needs to be reinvented as the generator of credit instead of the book keeper of foreign debt."
Kevin Rudd did not have to borrow from China for stimulus inflationery creation.He borrowed from China so we could purchase more consumerables from that very same country to keep people in the importing and retail industry in jobs.

It is totally unsustainable,yet our pop media herald his policies as being a saviour? It is total insanity! -2+-2 does not equal +4.
It is -4.

Arjay,
I SAY AGAIN
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The problem is not the tool, the Fed. The Fed is wholly owned and operated and by the banksters.
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The banksters of most all countries are being bailed out by the people. Neither Iceland nor Ireland are under control of the Fed but that are facing economic disaster to pay off international millionaire banksters billion dollar bets.