http://rt.com/shows/keiser-report/episode-446-max-keiser-420/ In this eposide Max Keiser reveals how the price of oil is manipulated along with interest rates (LIBOR) and even the price of gold.

He also has an interview with Dr Michael Hudson about his new book,'The Bubble and Beyond'. Dr Hudson notes that we are now in "Debt Deflation" Even though banks are loaning more money at low interest rates, prices for essentials are falling but unemployment is rising,however taxes to service Govt debt are increasing.People think cheap loans are great but are borrowing much more to buy over inflated assests.Hence we have deflation caused by too much debt.

Most of this new money created is inflating the property markets and share markets.People do not have enough money to buy beyond essential survival goods because of debt and taxes.Thus the economy will not grow, however there is $ trillions available for the derivative market.Our banks derivative exposure has grown from $14 trillion in 2010 to $20 trillion today.Why do we have a shortage of money when Central Bankers are creating so much gambling money?

Dr Hudson also notes that Corporations are not borrowing to expand business but to make money via take overs and speculation.People are spending 40% of their income to service debt on over inflated assets.Student loan debt now exceeds credit card debt.

What are your solutions?

What are your solutions?
Arjay,
Don't vote for any party that has lawyers for candidates. Learn how to do petitions & pester the Government incessantly to lower the fuel tax & reform to flat tax & introduce national service. The flow-on from that alone will sort a large amount of the problems we're facing now. What this means is to restore discipline which will bring down the incidence of living beyond our means. Don't think so ? Have you tried it ? No ! Then don't discredit the proposals ! Make people accountable via referendum. There's so much you can do if you only have the guts to put your details onto a petition form.

One solution, I humbly suggest, would be to question your sources more rigorously, and not take everything they say at face value. Which is, of course, what you tell everyone else they should do.

For a start, question this:

>>Why do we have a shortage of money...<<

I thought the problem was that there is too much of the stuff being created? That is what you have been telling us, after all...

>>People think cheap loans are great but are borrowing much more to buy over inflated assests<<

Another solution would be for you to educate yourself on the fundamentals of finance, so that you could understand just a little of what goes on around you. It still puzzles me why you resist doing so - although it could be that you are concerned that if you do start to understand it, you will realize how much you have managed to get wrong over the years.

That would be a major mental block to overcome, I have to admit.

Another solution would be for you to educate yourself on the fundamentals of finance,
Pericles,
That is like saying "don't do as we do, do as we tell you to do", The so-called complexities of the finance market are nothing more than a criminal deceiving by greed mongers & incompetent Government officials. There is nothing complex about everyone paying the same rate of tax. Period ! I'm sick of seeing people claiming this'n that for some ficticious "business" which none of the incompetent officials bother to check on.
Yeah, I don't understand the finance market, maybe you're right, maybe you're wrong. You (not you personally Pericles) can't prove me wrong because you haven't proven to me that flat tax doesn't work. Just saying it won't work without trying it is not proof.

Individual,Pericles does not believe that the derivative market is a separate gambling economy.

As Dr Hudson notes,banks are not loaning money for real productive growth.The gambling and speculation continues as witnessed by the growth of derivatives in our banking sector.

Part of the solution has to be a Glass Steagall Act which many are now asking for in the USA/Europe.

Our mining boom has stalled and will continue to get weaker as China completes rail and port infrastructure in Africa.

We need to get back to Govt banking but also promote the growth of private mutual banking societies so more money stays here.

Address a topic like this on most blogs usually results in moronic non response.The general public have been dumbed down by our education system and that is the sad out come.

Any topic that goes beyond the experience of even our so called intellectuals usually gets relegated to the dustbin of no response.

Our so called modern civilisation is seduced by Hollywood fame,with no sense of personal integrity that differentiates us from all the other fools and power hungry morons on this planet.

Any topic that goes beyond the experience of even our so called intellectuals usually gets relegated to the dustbin of no response.
Arjay,
Perfectly put !

That's like what, individual?

>>Pericles, That is like saying "don't do as we do, do as we tell you to do"<<

Not really. It is like saying, if you want to know what people write in books, learn to read.

It doesn't mean you have to believe everything you read in those books, just that you can comprehend what has been written.

>>The so-called complexities of the finance market are nothing more than a criminal deceiving by greed mongers & incompetent Government officials.<<

Not really. They are mostly simple mathematics. The only trick is to understand how the numbers that you are looking at came into being. Take Arjay's hysteria over "derivatives" as an example. All he has to do to rest easy in his bed is to i) stop blindly accepting everything Barnaby Joyce tells him and ii) actually investigate the nature of the instruments himself. Believe me, they are not that difficult to understand, with the "eureka" moment arriving as soon as you discover that there are two halves to every transaction.

>>There is nothing complex about everyone paying the same rate of tax. Period !<<

Not complex, certainly. But it would seem to be a little unfair on the poorer members of our society if they all paid the same rate of tax as rich folk.

>>I'm sick of seeing people claiming this'n that for some ficticious "business" which none of the incompetent officials bother to check on.<<

I totally agree. It should be a criminal offence to claim against a fictitious business.

Oh, right. It is. Fancy that.

>>Yeah, I don't understand the finance market, maybe you're right, maybe you're wrong.<<

Very true, very true. Maybe I am.

I'd just like to point out, though, that in general the odds tend to be stacked in favour of someone who knows something of the topic at hand. My understanding of quantum physics, for example, tends to dissuade me from entering a discussion between quantum physicists. But when I do take the plunge, I am unsurprised when they tell me to pull my head in.

pericles,
All of business & the public service is about who you know, not so much what you know. I have presently a situation where several tradesmen totally support my design proposals but the educated engineer & those who are covering for him for their own sake & continued protection are wasting heaps of your tax dollar simply so they don't have to admit that one of us made more sense. If you don't call spending a 100 grand & it is still not working not wasting tax dollars then what is. Considering our proposal could have solved the problem with about half a days's work, no other costs. Remember it's your tax & also remember how many such egoists are out there wasting your money in the same manner.
I'm sure Clive will very interested in the details.

Dr Michael Hudson and our Dr Steven Keen are but a few who question this GFC failed system.It is broke and we do need to fix it.

Many people like Pericles hate the idea of Govt creating money.Well we can premote mutual banking societies that would create a more equitable share of the wealth.ABACUS Banking is one such society but won't reveal their exposure to derivatives.They could well be just another appendage of this present corrupt system.

Since the sale of the Commomwealth Bank shareholders such as JP Morgan,HSBC and Citibank hold almost 40% of the shares in our entire banking system and our major resource companies.The profits go OS and we get left with more debt.

As Prof William K Black notes,our banking system is rotten to the core.

BTW Pericles that sight http://barnabyisright.com/ is not endorsed by Barnaby Joyce.A bit deceptive I think and also showing his photo on their home page.

That's tragic, Arjay.

>>BTW Pericles that sight http://barnabyisright.com/ is not endorsed by Barnaby Joyce.A bit deceptive I think and also showing his photo on their home page.<<

So, all the time you have been feeding us his words of wisdom...

http://forum.onlineopinion.com.au/thread.asp?discussion=5223#141363

...and getting hyper-excited over it all, the whole thing has been a spoof? Quelle horreure!

You must feel very much let down. Who can you turn to now, I wonder?

But this is very nice of you...

>>Many people like Pericles<<

Well, shucks...

Oh, wait...

>>Many people like Pericles hate the idea of Govt creating money<<

That's more like it.

But surely, isn't that what you have been complaining about? Quantitative Easing, and all that? The creation of dollars that simply increase the indebtedness of the nation?

Admittedly, I haven't always been entirely comfortable with it, but it has been the better choice to combat most of the GFC-induced pain. The alternatives all seemed to be rather harsh to me - economic stagnation, a flood of business bankruptcies and rising unemployment.

>>Well we can premote mutual banking societies that would create a more equitable share of the wealth.<<

We actually have many of these already, Arjay, they are called Credit Unions. Abacus is simply the industry body that represents their common interests. It isn't a financial institution in its own right, so is unlikely to have much, if any, exposure to derivatives.

The Credit Unions themselves do, of course, use derivative products in the normal conduct of their business, like any other organization that needs to minimize its risk. Look, here's one, the Southern Cross Credit Union...

"The Credit Union uses derivative financial instruments to hedge its exposure to interest rate risks arising from operational activities"

http://www.sccu.com.au/reports/annual/sccu2012.pdf

But relax. Now that you know Barnaby isn't concerned, why should you be?

Not complex, certainly. But it would seem to be a little unfair on the poorer members of our society if they all paid the same rate of tax as rich folk.
Pericles,
You make it sound like the rich pay a higher rate of tax. A bit deceitful there aren't you ?
The wage earner can't write off expenses.

Pericles just because Barnaby Joyce does not endorse a sight does not make the stats wrong.Our banks derivative exposue has been published in Bloomberg.The Commonwealth Bank for the first time this year refuses to disclose their exposure to derivatives.Why?

"""
Address a topic like this on most blogs usually results in moronic non response.The general public have been dumbed down by our education system and that is the sad out come.
"""

Not so, Arjay. You're expecting people to understand a topic which can take years of learning at university level and then years on the job as an economist/money shuffler. Not forgetting that new ways of doing things crop up on a daily basis. Most people are too busy just trying to make ends meat and look after their families.

Some of us know a little more but not enough to start or contribute to threads in a forum where none know any more or are interested in fighting a system so intrenched to everyone's daily lives(more than an Alabama tick) that changing it would scare the hell out of them. Not to mention getting anything truthful on the subject is akin to finding chook teeth on the moon!

Max Keiser is a Bitcoin whore, a charlatan like every other presstitue out there. He makes his money by spinning you the best financial doom story he can find. He sprinkles it with a bit of truth, avoids mentioning an alternative scenario and then pushes his latest barrow (being Bitcoin at the moment) to get the preppers, as many of them as possible to tune into his next prophecy of doom.

Most people know the system is fracked, Arjay. But none, not even the gurus know how to fix it. It's a matter of ridding the wave as far as you can into shore, hopefully far enough in that you can swim the remainder and plant your feet into some solid ground and take it from there. Get yourself some solid ground Arjay, so you can help a few to shore when the event happens!

That's an interesting distinction, individual.

>>Pericles, You make it sound like the rich pay a higher rate of tax. A bit deceitful there aren't you ? The wage earner can't write off expenses.<<

You seem to have defined "rich" as someone who does not earn a wage, but you also must know that within the wage system, tax is graded so that the poor pay less as a percentage than the higher paid. So, point one, in the case of wages, the rich do pay tax at a higher rate than the poor.

Point two. In order to "write off expenses", as you describe it, you need to have made some kind of investment, and to have actually spent that money. Those payments find their way into the taxable income of others, reducing the income of the investor, and increasing the total tax take.

This avenue is equally open to the "poor", by the way. I personally know people who have started businesses with nothing more than the sweat of their brow, who have the ability to "write off expenses", but who are still, by any measure, not at all rich.

And Arjay, we've been over this before. Many times.

>>Our banks derivative exposue has been published in Bloomberg<<

And what exactly did they say about it?

>>The Commonwealth Bank for the first time this year refuses to disclose their exposure to derivatives.Why?<<

Wrong. Here's their annual report.

http://www.commbank.com.au/about-us/shareholders/pdfs/annual-reports/2012_Commonwealth_Bank_Annual_Report.pdf

Both derivative assets and derivative liabilities are published, on page 97.

Derivative Assets: $38,937 million
Derivative Liabilities $39,221 million

A net exposure of [gasp] $284 million, around 0.7% of their net asset base.

You see this as a screaming headline: "Commbank has $80 billion in derivatives!"

Which is of course literally true, but a meaningless number on its own.

To be fair to Arjay... maybe he believes that net exposure is held against his Commonwealth Bank account and they'll take $284m out of it in the event of a 'collapse'?

In which case he should threaten to move his account to another bank - then time how quickly bank reps take in grovelling with offers to retain his business.

(Here's a fun game: at an ATM whilst the machine is 'churning' check out the receipts poking from the bin or lying around... I award myself points for finding ones where the account balances are less than the amount I'm withdrawing.)

WMTrevor Pericles does not want to believe. http://www.rba.govt.au/publications/bulletin/2012/dec/5.html BIS Semiannual survey on 6 Aussie banks.Over the Counter Deivative exposure a whopping $17 trillion.That link is correct but won't work.Just google RBA Aust OTC Derivative Markets

The CBA did not reveal the truth.http://cecaust.com.au/main.asp?sub=releases&id=2013_02_22_CBA_hiding.html

The link is correct Arjay once you change the '.govt' to the correct '.gov'... then it works.

By the way, did you read the explanation in the RBA Bulletin's "Box A: Understanding the Three Measures of Market Size"?

In order to "write off expenses", as you describe it, you need to have made some kind of investment, and to have actually spent that money.
Pericles,
The problem has arisen that the definition of investment is becoming less defined by the minute. In my view there shouldn't even be such a term as investment. but that's another story, You want something badly enough then you either ask someone to give it to you, steal it or buy it. Either way you're obtaining something that you desire. You should not have the right as you have presently, to expect others i.e.taxpayers to subsidise you. Writing it off is asking others to back you. What is an investment ? It could be anything that you spend your money on with the goal of getting back more than yo laid out. Nothing wrong with that as long as you do all your paying yourself. Why should I pay tax at say 40% on a car when you buy the same car but write it it off in tax ? Instantly I'm being discriminated against. If we both desire the same car then we both should pay the same price. No writing off nor anything period ! Earn a Dollar pay 10% tax, spend a Dollar pay 10% GST. There, everyone's getting the same deal. What's wrong with that ? Of course that would negate the artificial & utterly unnecessary complexity of it all & it would leave those financial hangers-on dangling in the air pondering life without being able to exploit others.

We seem to be talking at cross purposes here, individual.

>>Either way you're obtaining something that you desire. You should not have the right as you have presently, to expect others i.e.taxpayers to subsidise you. Writing it off is asking others to back you.<<

In any business, it is normal practice to write down an asset over time. This appears as depreciation in your profit and loss account, which is an expense. The taxman actually insists that you do this, otherwise you would claim the whole lot as a business expense in year one.

If you are suggesting that no business should be allowed to offset expenses against revenue, and should pay tax on the revenue instead, that's fine. But that does not take into account the very different nature of different businesses - no airline, for example, would ever get off the ground if its billion dollars of investment in airliners was treated the same as the corner store filling its shelves with a consignment of Mars bars.

>>Why should I pay tax at say 40% on a car when you buy the same car but write it it off in tax?<<

If you have a legitimate business, and the car is a legitimate business expense, of course you should be able to write its value off, over time, against the revenue it generates. But you cannot do this as a private citizen. Nor can I.

And Arjay, the article you cite - as WmTrevor has gently pointed out - actually supports my position, not yours. I suggest you read it again. All of it.

I doubt you will understand it, though. Which is a real pity.

it is normal practice to write down an asset over time.
no airline, for example, would ever get off the ground if its billion dollars of investment in airliners was treated the same as the corner store filling its shelves with a consignment of Mars bars.
Pericles,
Yes I know this is how it goes but it's not a sustainable system hence the cracks appearing all over the place. Greece, Spain & probably Australia next are the first ones to come down with that symptom that is our economic system according to the super greedy & their hangers-on financial experts.
Imagine if a flat tax were introduced. These people would have to do with 3 million per year instead of twenty. Gee that would be tough. It would also cut emission by some great degree but hey, we don't want to reduce emission either when it's something that can be taxed, do we ?
It's all about excessive greed & ego not just greed. They & incompetent Governments are responsible for much of the suffering that goes on. They're no better than the religious morons.

Wow, individual, that's a new one.

>>Yes I know this is how it goes but it's not a sustainable system hence the cracks appearing all over the place. Greece, Spain & probably Australia next are the first ones to come down with that symptom that is our economic system <<

You actually believe that the financial problems in Greece and Spain are the result of companies being able to depreciate assets on their balance sheet?

Wow.

Pericles,
The depreciating of assets & subsequent wrtiing off which is in fact a mere making all of us pay is a part of the problems that are bringing down whole countries. It's been happening for a long time but it's only now & in the very near future that it'll become more obvious.
The absolutely no value for our tax dollar Public Service bureaucracy is probably worse because it produces nothing of even the slightest value. When the situation becomes a little tougher it'll be the bureaucrats who will go first. Look how much money the Gillard Government is asking Ford to pay back now. Prime example of a system failing.

Intriguing concept, individual.

>>Pericles, The depreciating of assets & subsequent wrtiing off which is in fact a mere making all of us pay<<

In what way are we paying (I assume you mean the taxpayer) for the depreciation of assets?

Let me walk you through an example.

If Qantas buys a six-pack of Dreamliners from Boeing for a billion dollars, would you or would you not count this as a business expense, and reduce Qantas' tax bill accordingly?

If you say yes, then all you are doing is allowing "instant" depreciation of the asset. It wouldn't appear on the balance sheet, as it is fully written off.

If you say no, and at the same time insist that depreciation should not be allowed, then you are in fact arguing that no business expense whatsoever should be permitted. Tax could only be levied in those circumstances on revenue, not profit.

Which is an extremely difficult proposition, and one that would require different tax rates for different businesses. Consider the different revenue and profit profiles of, say, Coles and Qantas. Or BHP and AMP. Think it through, then get back to us.

Pericles,
What you are doing is putting prices & costs on the table which are due to the present system. I'm convinced that if there were a flat tax those 6 dream liners wouldn't cost a billion in the first place. There wouldn't be any as you say different tax rates for different businesses. Earn pay 10%, spend, your buyer pays 10%. Government gets 20% of every dollar. Period !
Public Service pay ceiling under the present conditions should be $150,000.-
The PM & Ministers, Premiers & ministers are now paid way too much.
CEO's get fortunes for failing miserably. It's a dead loss all around, a loss we can no longer tolerate.

So your saying, individual: I should be paying tax on my gross income and not on my net income? I should be paying tax on wages I pay to my employees as well as them paying tax? If I buy them toilet paper, I should be paying tax on the money I spent on toilet paper?

It's bad enough with the red tape/bureaucracy/fees/taxes/insurances/arse wiping employers have to go through now and you want us to pay taxes on losses? Who in their right mind would start a business under those circumstances? Many are getting out now because it's just not worth it anymore in this country!

The basic question is why new money is created from nothing and should it be done by an elite few private individuals?

We now have a $1.5 TRILLION economy.With 3% growth + 3% inflation new money added to our economy is $90 billion pa.Our banks cannot create all this money so a large % has to borrowed OS.Add into thd mix the fact that 40% of banking shares are owned by the likes of HSBC,Citibank and JP Morgan this country has a serious debt problem.

If even your inflationary money gets created as debt,imputs in terms of loans will always be exceeeded by out goings interms of principal + debt on money for growth + inflation.

Dr Michael Hudson visited our RBA back in 2009 and asked them why cannot they create some money for our banks.He got nowhere.

Why cannot the RBA create just our inflationary money of $90 billion per annum.Just on inflationary money we lose our 3 times.First on the depreciation of our currency,then on repaying the principal and last repaying the interest on what is rightfully ours.

We could reduce taxes by over 50 billion pa or have debt free infrastructure.Gillard did not have to borrow $40billion from China,the RBA could have done it.

All immigration should stop until this banking mess is sorted,since under this present system,the more growth we have,the more debt we incur.It is a rort by private banks that must end.

Correction ,that inflationary money is about $50 billion pa including interest.

Many are getting out now because it's just not worth it anymore in this country!
RawMustard,
I would too in a moment if I could find a country that takes in near pensioners. re the tax on toilet paper for your employees, as I said you buy something you pay 10% GST no if's no but's.
Who would you expect should pay it instead of you ? Gross income is the only income because net income is your profit. It's not that you're not passing on your expenses to the customer already. We all have expenses business or no business. Wring things off is asking the taxpayer to pay for it, that's morally wrong. Like the electrician in our community who writes off his fishing fuel as business expenses. How many such business people do you think there are & costing US. Not very economic at all.

That's an interesting thought, individual. Can you back it up with some simple calculations?

>>I'm convinced that if there were a flat tax those 6 dream liners wouldn't cost a billion in the first place.<<

Or if the sums are difficult, just point out a) the manner in which a "flat tax" will make the Dreamliners cheaper and b) what impact a "flat tax" has on government revenue.

Maybe the answer is here:

>>There wouldn't be any as you say different tax rates for different businesses. Earn pay 10%, spend, your buyer pays 10%. Government gets 20% of every dollar. Period !<<

But the para seems to be lacking a couple of verbs here and there, so it is difficult to find out what you are suggesting. Is the 10% supposed to be GST, or something else?

>>Like the electrician in our community who writes off his fishing fuel as business expenses.<<

You can't support your stance using illegal activities as your evidence. Legitimate business expenses are the bedrock of a company's profit and loss account - you cannot expect any business to survive if it is required to pay tax calculated on revenue alone.

Individual and Pericles, if we pressured the RBA just to create inflationary money, this would save individuals an average of almost $5000 pa in tax.Could not this money be also used to create debt free infrastructure?

Only a couple of problems with that suggestion, Arjay.

>>...if we pressured the RBA just to create inflationary money, this would save individuals an average of almost $5000 pa in tax.Could not this money be also used to create debt free infrastructure?<<

The Reserve Bank does not "create" money. It is the Government that issues the instruments that increase or decrease the volume of money in the economy. The Reserve Bank merely advises them on the shape of the economy, and the various pressures it might be under, making recommendations along the way. It does sort-of make its own decisions on interest rates, but those are also heavily market-driven, and nothing to do with "creating" money.

Apart from that, I'd be interested to hear how this would "save" money for individuals, and how it would lead to a "debt free infrastructure", neither of which is immediately obvious.