Something else that cannot grow when Australian wages and incomes per capita stagnate is household DEBT per capita ……unless interest rates and lending standards fall.
And when household debt can no longer expand that component of the money supply representing household debt stops expanding too. If households actually start repaying their loans the money supply starts contracting with deflationary consequences. The horror!
But total household debt (and the money supply) can still grow providing Australia continues to import more people willing to sign up to new debt contracts with our private banks.
In other words a high rates of immigration can allow total credit to grow even as growth per capita falls.
It is ironic that so many people are cynical and opposed to high rates of immigration while at the same time promoting the further cutting of interest rates to promote a further expansion of household debt.
Cutting immigration makes it harder to maintain total credit growth and requires even larger cuts to interest rates and even lower lending standards to maintain total credit growth….everything else being equal.
In other words, it makes NO sense to be arguing for cuts to immigration, if you are not interested in or do not believe that monetary system reform is possible, as immigration helps keep the Australian monetary Ponzi cartel/scheme from imploding.
Of course there is an alternative to running a monetary system on unstable ever expanding private bank balance sheet liabilities and frantically BEGGING the central bank to stimulate household demand for them by cutting rates and/ or lending standards.
Allow the central bank balance sheet to grow by allowing everyone to open accounts at the central bank and increasing the supply of central bank liabilities to meet the demand for them until the inflation limit is hit (the limit will depend on your perspective. Inflation loving old school Keynesians may have a higher limit).
Expanding the supply requires nothing more than SOME directly monetised fiscal policy and that involves nothing more than the government directing the RBA to buy some zero interest bonds from treasury.
Keep in mind that the purpose of these accounts is to simply allow the public a more convenient form of central bank liabilities ……more convenient than notes and coins…..and like those other types of central bank liabilities no interest will paid on balances in central bank accounts.
NOW is exactly the right time to expand the supply of central bank liabilities into the money supply as it will reduce the almost total dependence on private bank liabilities and the usurious debt contracts they involve.
AND all it requires is allowing everybody the same privilege that is given to the private banks. The right to operate deposit accounts at the central bank.
Central bank cybercurrencies are another form of central bank liabilities that are just around the corner.
So there could be four forms of central bank liabilities that could be made available to the general public and non banks to use.
3. Central bank cybercurrencies
4. Central bank deposit accounts
I should emphasise that I am not opposed to private money and foreign money as monetary competition is healthy. So people will remain free to ‘invest’ in private banks in the form of unsecured at call investments (currently called deposits) but naturally they will lose any public guarantee. Why should investments in private banks get a taxpayer guarantee anyway. Note: As Private Banks have traditionally engaged in a form of fraud it will be necessary to maintain close regulation over their activities as it is not in anyone’s interest to have crooked bankers accepting investment funds and then blowing up the bank by making bad loans to ‘mates’ and then leaving town.
The key point is ending the loony state / private bank monopoly cartel that we currently have and has been a dud from the start.
It’s not as if we have a choice anyway – those countries in the various US defined axis’ of evil or “bad guys” will be doing it sooner than we think and the less brain dead countries (the Northern Europeans) in the west as well.
It will be just dumb down under Australia left hanging onto to the US fraying coat tails
Wake up Australia…..it is time to try something that will work rather than accelerate down a dead end.