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BREAKING NEWS!!!

Wow!

The Australian Bankers Association produces research that claims that a fundamental part (rising house prices) of an economic model, whereby they get to ‘create’ money with a trailing commission attached, is not presenting any risk to the national economy.

My goodness, wonders will never cease.    Smells like a tag team effort with the RBA paper yesterday explaining that household debt is nooooooothing to worry about as the asset rich who benefit most from the ponzi are best placed to ride out any hiccups.

If private banks wish to continue the fraudulent practice of fractional or zero reserve banking the very least they could do is go back to doing it the old fashioned way and start issuing their own bank notes – I.e. a bankers promise to pay. Instead of creating their own funny money and calling it fiat (public money).

(Yes – the law that allows them to perform the alchemy of turning a banker’s promise to pay into fiat / public money must be changed)

That way all the new money they create will be entirely their own and people can decide for themselves what value to attach to it.

There will be exchange rates between Bank created funny money and the national money supply – which will be managed by the government elected by the people.

No taxpayer guarantees and they live and die by their promissory note printing practices.

The average saver, who may now prefer to save in the national currency rather than private bank funny money, will be able to save in 100% reserved accounts – either at the private banks or at a network of national saving branches at post offices.

The transition to the new system will not be difficult. All current savings can be locked in as public fiat and transferred to national currency accounts at the banks or post offices. If people want to store some of their wealth in accounts denominated in private bank funny money they are welcome to do so – buyer beware of course.

The banks can choose to lend in national currency or their own promissory notes (aka funny money)

But if they lend in the former they must first raise the required funds at term from savers.

It is time to get the private bank’s grubby paws off the public money supply.

At the very least, if they are going to create money endogenously (accounting entries recording their dubious promises to pay) it should be clearly marked as bank funny money.

The Westpac Wozzo

The CBA Golden Bilby

The NAB Numpty

The ANZ Rusty Nugget.