Stern,
"So if a few folk end-up broke and homeless, let's just say it is par for the course..."

Arjay mentioned the situation in California where they owe nineteen billion and have just begun to enforce compulsory three day furlows a month for most government workers who are being paid a very low wage.... that no doubt is par for the course., as well.
California, if it was a country, would have the eighth largest economy in the world...but they are writing IOU's to pay their debts...par for the course, no doubt.
Slashing programs left, right and centre, ordering government workers off the job...the state is broke...nothing wrong - par for the course.

Yabby "We've been there before." "Govt should not have control of money creation" We are are still in the greatest economic melt down in over 70 yrs and it could become a lot worse than the Great Depression.

I know people who have over $30,000 on credit card and trapped in debt.We have $ 45 billion owing on credit card,total debt of $ 1.2 trillion( over $200,000 for very working person),there are $ trillions of derivatives inter-wovern in our share market and thus super funds.If this unravels,it will be a disaster.You then have the audacity to say we can trust all powerful private globlal reserve banks.Even Pericles conceeded defeat a few months ago when I said if we let the IMF or private banks create inflationaary money in their computers and get charged interest on it,why not create our own money and have far less debt?

Why would you pay interest on money that should be rightfully yours.ie it represents your own productivty? I think you have a disconnect with logic here Yabby? The synapses are not connecting.When we owned the Commonwealth Bank,debt levels were far lower than now.If proper regulation is there,we will have far less debt,more productivity and savings if taxes are taken off savings.

Poirot,I think it is time to educate the population.It can been done effectively through the children at school who will in turn educate their parents.The trick is simple explanations that relate to their experiences.

I think things really started to get out of hand when that 9:1 or 10:1 ratio used for the Fractional Reserve system was artifically boosted through deregulation in the US.

I've read that if you signed-up for a credit card with say, a $5,000 limit, the bank would treat that as if you opened a "virtual account" and loan money on that basis alone - even if the card was never used.

The true Fractional Reserve ratio is believed to have climbed to 25:1 and it only took a minor jolt to bring the whole house of cards down.

Now they're fixing it by creating yet more debt.

As the saying goes - "stupidity got us into this mess, maybe stupidity will get us out of it".

*Slashing programs left, right and centre, ordering government workers off the job...the state is broke...nothing wrong - par for the course.*

Poirot, it sounds to me that you are trying to blame the financial
system, for what is wrong with the electoral system. The way I
understand the Californian situation, citizens have the right to
pass various referendums, which they did. Problem is that they
voted for more and more from Govt, but denied Govt the right to
raise taxes, to pay for all those things. The net result is clear
for all to see. If you spend more then you earn, there will be
disaster, be that private or be that a Govt.

*Even Pericles conceeded defeat a few months ago*

When it comes to economic matters Arjay, I have yet to see Pericles
concede defeat to any of your claims. But keep dreaming if you will.

*When we owned the Commonwealth Bank,debt levels were far lower than now.*

I know Arjay, credit was simply not available. I remember going
crawling to the Commonwealth Development Bank for a loan, in the
70s. They knocked me back, clearly in their eyes I had no hope
of being a farmer. Luckily the Commercial Bank, later to become
Westpac, had some faith in me. I still bank with them to this
day.

Now if you are a young plumber or electrician or whatever and want
to set up your own business, then you need credit to do so. Young
people can do these things today. They were stuck on wages before
that credit was available. Only the rich with cash were calling the
shots. That sounds fair to you?

Wobbles if the 25:1 fractional reserve creation of money is true,then we are in for hyper-inflation and disaster.This means that interest rates will rise dramatically because the banks won't lose out,property prices will fall dramatically and those cashed up will buying property very cheaply.It could mean a sub-prime mortage debacle for us since our properties are way over priced.

It many have got beyond the stage of stopping a really big collapse.I recently met a Professor who has credible contacts in Swiss Banking,they also hyper-inflation or even stag-flation with prices increasing with high interest rates and high unemployment.We are really in a worse situation than the Great Depression because we a service /consumer based economy that services wants rather needs.We virtually have no manufacturing.

Yabby,If you are in the counterfeiting criminal business,why would you pay a foreign company to run your presses here in Australia?

Poirot When I lived in USA (not just vacationing) the view of California, from the rest of the States was that California was over-governed, over-taxed and over-itself.

You see all those poor-paid government sector workers would not have had jobs in other states in the first place.

Then the State of California would not have needed to levy the “state income tax” which does not exist in say Texas or New Hampshire.

Then the poor paid state workers would not be taking furlows or having their pay reduced.

It is like this Poirot, when you institutionalise bad, inefficient socialism it costs and you create vulnerable class.

It happened in UK in 1970s millions of useless nationalised industry workers who did not have productive jobs which could be justified on the basis of added-value but socialist jobs which added no value except to employ an individual in the comfort of pointless existence, instead of creating wealth by having a real job.

So “Slashing programs left, right and centre, ordering government workers off the job...the state is broke...nothing wrong - par for the course.”

I would note the 8th largest economy is based on the private sector, the ones who create the wealth from which the state extorts taxes to pay these pointless government workers

Especially when the programs were based on socialist mantra and pointless in the first place.

Just like Greece, California has to bite the bullet, so to speak and get its profligacy back under control.

You might complain but in truth, It is all just the price of previous, stupid socialist excess.

Arjay, I guess you still have not worked it our yet,

The primary cause for hyper-inflation is when governments run a sustained deficit budget, spending money in excess of the taxes they levy, like Greece

And like the morons of socialism which we are suffering from in the Rudd/Gissards government.....