Another thought just occurred to me, on the topic of "creating money".

Many of us have money in Super Funds, right?

Public servants, on the other hand, do not.

They still live in a world where their Super is calculated as a factor of their final salaries.

Where, pray tell us Arjay, does the money that supports this little gem come from?

Does it exist? Or is it simply an amount that is actuarially determined from time to time, and recorded in a ledger somewhere.

Because on of the realities of this particular system is that right now, there is probably an enormous hole in that bucket too.

Let me know when you have worked it out, Arjay.

And then position this particular bucket of potential cash within the four strong walls of your NMF.

Hello Arjay & others,
I have had a smile at your exchanges on a subject of banking which
to me is a rather black art.
However surely we cannot rely on economists ?
They still believe that the tooth fairy will provide us with an ever
increasing rate of growth.

I know that you are aware of the limits of energy that we have come up
against and surely we need a markedly differently structured banking
system to cope with the loss of interest charging, amongst other new
parameters in the financial scene ?

Pericles,First of all we use the expertise and financial structures of the RBA.Just re-name it and re-write it's charter and constitution.Some of the board members will have to go since they cannot wear two hats.By vitue of removing the banks's ability of creating inflationary money the NMF would have access to a large pool of finance when it creates money.Also when the GDP increases say of 3.5% another $35 billion in money needs to be generated,so instead of the private banks owning it,the vast pop including you benefits.Now presently the RBA are happy for inflation to be 2-3% range which dilutes all our wealth,so if a NMF creates this amount in inflationary money,there is another $30 billion pa that can be used.

Now Ron paul wants to go back to a gold or silver standard.I do not think that this will work since not enough liquidity will be created to equal new human potential that may arise.As I said before,money represents human potential and this is real wealth.If Pericles comes up with a wizz bang idea and we have a gold standard backing our money,then limited funds will stop new concepts from being developed.So I think that a certain degee of inflation is in fact good.We just have to try and make sure that the finance reaches productive enterprise instead of inflating property and share values.

Perhaps a NMF could also have a scientific and innovation branch that is able to deternmine worth while Australian concepts that need funding.Too many of our innovations go off shore.

Whether or not such and institution should be involved in other areas such as super,I'm unsure.Too many hats causes conflict of interest and we need diversity/competition in the market for everyone to benefit.

Yabby you are clutching at straws.I have little interest in La Rouche.This is my concept.I have not even searched on the web to see if someone has come up with a similar idea.Perhaps you could do it for me.I wrote this a few hrs after getting the idea.

Examinator,thanks for the accolades.Pericles,at least you are will to explore new ideas.

Pericles in regards to Public Servants super funds,most of this has been funded by taxes.The state Govts in their old schemes cannot be funded alone by investment in th real economy.This is why you and I are taxed to to hilt by our State Govts.John Howard tried to address this with the Future fund of $40 billion,but this is obiviously not enough.

Perhaps you are a Public Servant and thus have a "manifest destiny philosophy" towards the masses being slaves to your indulgences.

Arjay, it is with the greatest respect that I suggest you take a short course in Finance, simply in order to understand how far from reality your posts have become.

>>First of all we use the expertise and financial structures of the RBA.Just re-name it and re-write it's charter and constitution...By vitue of removing the banks's ability of creating inflationary money the NMF would have access to a large pool of finance when it creates money.<<

Here is the balance sheet of the RBA. which it updates each week.

http://www.rba.gov.au/Statistics/statem_liabilities_assets.html

Where is the "large pool of finance?" from which to "create money?"

Remember, that double-entry bookkeeping requires that the balance sheet errr... balances.

Explain to me the process by which "when the GDP increases say of 3.5% another $35 billion in money [is] generated"

Fire away. You can probably find all the background information you need on the Internet, so - go for it.

>>Perhaps a NMF could also have a scientific and innovation branch that is able to deternmine worth while Australian concepts that need funding.Too many of our innovations go off shore.<<

In my experience, Bankers are the very worst category of people who you would want to evaluate innovation. Even worse than the government, and that is saying a great deal.

>>Pericles in regards to Public Servants super funds,most of this has been funded by taxes<<

The reality is that public service pensions have been until very recently, unfunded. That is, there cannot be a specific identifiable amount of money put aside to pay them when they become due.

"To understand the significance of the recording of government unfunded pension schemes in Australia, at 30 June 2006 the value of these liabilities for all governments stood at AUD 202,736 million<<

http://www.bis.org/ifc/publ/ifcb28zb.pdf

Also, at the present level of the securities markets, it is highly likely that a further hole has developed in the bucket, and it needs refilling.

Taxation on its own cannot do the job without sinking the entire economy - if you extract those kind of numbers from it, we will be in recession for decades.

*By vitue of removing the banks's ability of creating inflationary money the NMF would have access to a large pool of finance when it creates money.*

Arjay, it is only the RBA which has the power to simply add some
zeros to its computers and create more $ in that way. What banks
do is in fact circulate the same money over and over. They have
to keep a % of that as liquid reserves. Most of our banks operate
around the 8% mark. The RBA has tight control over the banks in
that if it wants to decrease the money supply, it simply increases
the level of required reserves. Therefore that same money can
can go around and around less times.

Its not as if banks can do what the RBA does. Any funds that they
lend out, they have to borrow somewhere, minus the required levels
of reserves, which can be in cash or deposited at the RBA.