Gestalt theory proposes that the whole,is different from the sum of the parts.Perhaps this is why so many economists and environmentals get it so wrong and so regularly.

In the precise sciences of physics, engineering and chemistry the sum of the parts does often equal the whole.However our linear logic fails us with the interaction of multiple variables.

In the field of economics I propose that we that we have a third level of democracy beyond Govt and private enterprise.We need a National Monetary Fund.[NMF] Instead of banks and our own RBA creating currency from nothing,we can develop a third body owned by the people who elect members to it's board.A National Monetary Fund would be independant of Govt and have limited functions thus would not be exposed to the excesses of Govt empire building or the avarice of Corporate empires.The NMF would replace the bank's fractional reserve system whereby they create from nothing, 9 times the money they have on their books.

A NMF could provide liquidity to the banks as well as to Govt but not businesses or individuals.This would be the function of the banks.If every person in Aust is a share holder,then the profits could then be distributed equally.It could be used as a pension fund which all individuals can only take profits upon retirement.It could be also used as a source of infrastructure funding that is sorely missing at the moment.

If run as a private enterprise body with salaries/job security is based on merit,it can be both a source of wealth and democracy for all Australians.

Those on the board of Governors of a NMF would have to have an economics or business degree in addition to having experience in private enterprise.Every 4 yrs have national elections to vote in or out new board members.It would have be non-partisian and no one could belong to a political party or be on the board of any other institution.

An NMF could over see and make recommendations on large Govt projects.eg in NSW the Desalination Plant should never have been built.It is far cheaper and makes more environmental scense to re-cycle existing waste water.State Govts could seek funding for important projects and an independant NMF could make sure that they have done all their homework before issueing funds.

Another positive point about such a body is that it does not take donations form interest groups wanting to push their own financial agendas.It is self funding and every Aust has an equal say whether they be poor or filthy rich.

People could invest additional funds if it was performing well but this would not give them additional voting rights.

If Pericles or Yabby read this,duck,since they will spitting chips with the venom of a King Cobra.

You seem a little defensive about your proposal, Arjay..

>>If Pericles or Yabby read this,duck,since they will spitting chips with the venom of a King Cobra.<<

Seems reasonable to me that this is a proposition we can explore together. We might both learn from it.

>>A NMF could provide liquidity to the banks as well as to Govt<<

Ok. This presumably is what makes it different from the present situation. So in this capacity, on what basis would it deliver this liquidity, i.e. what instruments would be used to move the funds around? Would they be in the form of loans? In which case what security would they require from the Banks?

Would Government loans need to be secured as well, or would we just trust them to pay up when the interest falls due?

>>If every person in Aust is a share holder,then the profits could then be distributed equally<<

First, we need to make a profit, of course.

But where there is profit, there is also risk. So how would losses be handled? And would the NMF be required to maintain a level of reserves, or would it simply dish out its profits as they are earned?

>>It could be used as a pension fund which all individuals can only take profits upon retirement<<

Well that answers the reserve question. It would have to keep some money available to pay these pensions. So, how much would be prudent?

>>It could be also used as a source of infrastructure funding that is sorely missing at the moment.<<

It sounds as though we are talking about a lot of money here.

Infrastructure fund, pension fund, lender to Banks and Government, and a source of income to every Australian.

Sounds good. Managed properly and prudently, it could easily work as you describe.

A couple of details are missing though. Presumably the NMF would themselves have to invest - what sort of assets would you allow them to hold?

And where would the money come from, that starts this enterprise going?

*If Pericles or Yabby read this,duck,since they will spitting chips with the venom of a King Cobra.*

Hehe Arjay, in fact I started laughing for I realised that you
are as confused as ever. You seemingly still don't understand
the banking system and the RBA largely does what you are
suggesting anyhow.

Wether you get to vote on who heads the Reserve Bank, is hardly
of significance. People voted for George Bush, that did not
make him a good prez, but in fact largely responsible for the
debacle that has been happening in the US.

All you have shown is that you would not have the knowledge to
get that one right either.

Arjay, I mean it sincerely, learn the basics before you sink
yourself armpits deep in economics.

Ajay
Full marks for the effort to think beyond constrictions of Yabby's world of deterministic status quo. I would remind you that most original thoughts emanated from comparative amateurs. Your seed is valid.

Although he is right in that your plan doesn't seem to have a means to solve the key short comings of the RBA now. As well fatal flaw in capitalism. Clearly we need a different way at looking at things Perecles' approach is at least sensible in that there maybe some wisdom to be found if no what is lost?

In an recent comment to a thunk tank article I described the scientific flaw in terms of a whimsical definition of an economist
"A dysfunctional sooth sayer lousy at predictions but boy can they tell you what happened."
Thunk tanks are nearly always little more than sophisticated spin source adjuncts to political ideology. In that they start with a dogma (Conclusion) and work back in order to justify it. i.e. a 'research institute into economic deregulation'.


The point is that the flawed practice of economics has so many flaws and imponderables in it prediction is impossible give current abilities (except in hind site) and even then the models apply in/under one circumstance probably won't fit else where.

It seems to me that the creation of money should be out of the hands of speculators, short term profiteers etc and based on actual value.
Given that broadly speaking the uncontrolled creation these quasi implements caused the crash and seemingly had part in at least the last 3.
Good luck

There you go Arjay, at least you got a patronising pat the on the
head from examinator.

Are you sure that you arn't just snipping bits of the latest, crazy
manifesto from LaRouche?