<<This solution only delays the crisis it for a few years and then the problem re-emerges. It has not been solved, only deferred.>>
It's called the economic cycle. That problem reemerges from time to time, and we have undiminished capacity to solve it the same way every time. But instead you want to treat the solution as the problem, and so make the real problem much much much much much bigger!

<<The world is now one economy and the laws of nature apply to the world as they used to in the 19th century if you were setting up a High street bank.>>
Economics is not nature, and unlike one 19th century bank, the amount of money in the system is not limited.

<<Too many people have been wasting your loans and Confidence is slipping, particularly in Zurich it would seem.>>
The value of the Swiss Franc shot up and you interpret that as confidence slipping? Seriously?

<<Should it all “tip over” the only holdings worth while are probably real estate and gold and possibly blue chip companies, but they will be worth half what they were.>>
There are lots of holdings that would still be worthwhile, but avoiding tipping over is still the best solution.

<<This is not issuing more unsecured credit when the problem is basically caused by issuing insecure credit. What that solution is I have no idea. You appear to think it is more credit but can you explain to me how more of the same medicine is going to work. Surely you need to try a different medicine.>>
You're wrongly conflating at least two very different problems. The problem of too much credit to the uncreditworthy ended in 2008. After that there was the opposite problem, with creditworthy companies finding it difficult to get credit. And now we have the related problem that there's too little opportunity for companies to make money.

Aidan. I think we both know the other’s views quite clearly and I certainly appreciate your point of view. I think we are going to have to wait for the market to decide who is right. Problem is that if you are right the market is going to stagger on for an indefinite number of years. If I am right we are going to have a really nasty recession and I hope another conference like Bretton Woods to get a currency in the world that cannot be manipulated and that seriously and automatically penalizes those that get it wrong. From that point the world can genuinely start to rebuild its assets.

It doesn’t have to be Gold based but Gold provides all the requisite facets. It is portable, indestructible, easily divisible and there is only a limited quantity available. Winston Churchill made the mistake of trying to get the U.K. back on the Gold Standard at $20 or the equivalent in pounds, and FDR made a killing for the U.S. by upping the price to $35. There is a lot of discussion available on what would be the correct figure now that we have the enormous unbacked QE credits to allow for. You get wild variations from $2,000, $5,000, $16,000 and even $40,000 an Oz - all estimated by various doubtful methods. But we need to be like FDR and not Winston ! If your scenario is right of course there will be many more QE’s to come and it will have to be even higher.

Swiss Bank sense. “The value of the Swiss Franc shot up and you interpret that as confidence slipping? Seriously?” Of course the Swiss franc shot up because their central bank saw sense and refused to be coupled to the Euro any more probably because they knew Mario Draghi was about to issue a cold draft of QE. Switzerland has always been a hard currency and they didn’t like what was happening to it. Therefore they decoupled before any more damage was done to the Swf and naturally it lept up to its proper value.

Dickybird, you may appreciate my position, but I certainly don't appreciate yours because the assumptions yours is based on are all demonstrably false!

The existing system "seriously and automatically penalizes those that get it wrong" far better than any centrally planned system could, but with the added advantage that the damage is self limiting. The world should be building its assets now, not hastening a crash by making its actions contingent on one!

<<It doesn’t have to be Gold based but Gold provides all the requisite facets. It is portable, indestructible, easily divisible and there is only a limited quantity available>>
That last facet is precisely what makes it unsuitable.

Dickybird, for someone who confesses that they don't understand debits and credits, you sure write a lot of words.

And give a lot of advice...

>>My advice, for what it is worth and I am well aware you don’t think it is worth anything, would be to hold a large percentage of your net assets in gold or gold related holding<<

Given that most ordinary folk in Australia count property as their cornerstone asset, how would you suggest they make the transition to gold?

http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0main+features402014

Once this has been achieved, what do you suggest they use as currency?

>>This is not issuing more unsecured credit when the problem is basically caused by issuing insecure credit. <<

What percentage of credit in Australia is unsecured, do you think?

>>Switzerland has always been a hard currency and they didn’t like what was happening to it.<<

Seriously, if you understand anything at all about 20th century history, I suggest you don't offer up the Swiss as examples of anything honest or ethical in the world of finance. There are very specific historical reasons why their currency has not been subject to the same external forces as the rest of Europe.