Here’s the ‘job description’ for the Reserve Bank of Australia (RBA):
‘It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank … are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:
(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia.’
Let’s see how they’re doing shall we?
This report card should paint the picture for you:
“The stability of the Currency” – given that the purchasing power of the dollar has diminished over 90% since the introduction of the RBA since the 1960′s there’s really only one grade I can give them… F.
“The maintenance of full employment” – this little catchphrase looks harmless but let’s put this in another context. 300 or so years ago the masters of the universe back then did the same thing by encouraging full employment – it was called serfdom.
In America at that time it was called slavery or indentured servitude. With a corrupted currency and no real savings the faces have changed but the game remains the same. We are all working (surviving) for a master of sorts. For that I give the RBA a… F.
“The economic prosperity and welfare of the people of Australia” – I will use the following benchmark. If the average Australian were to say today “That’s it I quit!” and stay at home how long could he/she live a comfortable life?
Let’s just say this average Australian has access to a backyard for veggies and a few chickens to slaughter or get eggs from. He has no dependants and he owns his own (paid off) house and he generates his own power.
He also collects his own rain water, disposes of his own effluent safely and he’s very handy with repairs. He has enough money to cover rates, insurance, health, vehicle rego and maybe a beer brewing kit.
I would say that this guy is OK.
The majority of us however, wouldn’t last a fortnight. That’s worthy of no more than a grade… F.
Three Fs isn’t a good score is it?
The thing is, Central Banks are not a natural development of banking. Instead they are Cartels who bestow favours to its members (the Banks and Government). They can only exist in a protected environment and by a special privilege of Law.
This special protection from competition granted by the Government (legal tender laws) is simple – by policing the people and forcing us to use this substitute money a portion of all profits derived from RBA dealings goes directly to the Australian Government. It’s a form of legalised counterfeiting.
The first action of any Reserve Bank is to eliminate real money (gold and silver) from the economy and introduce a money substitute a note or bill of receipt. We call this note the Australian Dollar.
This counterfeit money can then be printed at the sole discretion of a few board members or a political whim. And with this system come the inevitable inflation and the slow decay of the currency.
To give an analogy, when I was very young, [mumble] years ago, the cure for just about any ills was for my mother to put a few drops of brandy on my tongue. Well, if she could medicate me… my thought was why should I bother her, I’ll do it myself.
It didn’t take long before all my friends helped medicate themselves as well. It became very noticeable the level of the Brandy going down… How was I going to explain that one?
Ta-da! Easy. I just added water and the level was the same. Only the brandy was weaker, much weaker.
Like any boom there comes the inevitable bust or in my case a clip around the ear. My first real education on inflation.
The banks in this country are so highly leveraged with debt that without the RBA providing liquidity they would simply close the doors tomorrow. There is a storm brewing and I for one am battening down my financial hatches and buying some chickens, a generator and of course…
A beer brewing kit.
History tells us, the consequence of diluting a nations wealth usually results in a revolution at worst. Or a very major upheaval at best.
After a painful interlude, the inevitable result is the reversion to a ‘natural’ economy. That means the introduction of free market capitalism with gold and silver as its base.
And so it starts once more. Until governments get the urge to meddle again.
Yours in Freedom, Liberty and Sound Money.
Mark Thompson
(Thoughts from an Old Builder)
for Money Morning Australia
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You are welcome Sandra. It is a common rule of thumb that one should not spend more than 1% – 1.5% of one’s funds under management in fees. That means that a low cost provider would enable one to justify establishing a SMSF much quicker than the common recommendation. Based on that formula, you can justify $750pa in fees with as little as 50k of savings in your super, and the sooner you can take control of your savings, I am inclined to think, the better.
Sandra you speak about supply and demand (in respct to housing)as if the buyers were buying artichokes.”No too expensive Ill wait till they’re in season”
This is where you get it wrong.
People HAVE to have accomodation like they have to have water thats whats makes this topic such an emotional one.They are forced to rent or buy and some unfortunately , end up homeless.
So everyone with a job rents or buys a house.
The Market does’nt care who buys the properties,becuase of short supply they go to the highest bidder.
Until the government makes it easier for builders and developers prices will rise because the people who HAVE to have accom are over a barrel
plus, we could add, in the absence of sound money, income generating property and land will continue one of the ways in which people will try to protect the purchasing power of their savings from inflation. This is the so-called investment demand, which in the absence of sound and stable currency, all other things being equal, will continue to add to the upward pressure on prices.
John – I mostly agree with you. and that is why the government’s manipulation of the market is so unforgiveable! It is indeed a ‘captive audience’ to a large extent and this is why the people should rebel and vote them out for their misplaced socialist policies. The goverment uses the fact that people need shelter in order to steal more money from them.
Yes a simple extension on colonial slavery.
Please tell me this is a horrible heap of twaddle!
Yeah oh yeah……heaps and heaps?
My comment is awaiting moderation?
I’ve never been know for my moderation……It sounds like waiting to be censored.
Sorry, one last thing to say about Mr. Thompson.
He sounds like a completely cynical. I like to think the best is yet to come for Australia fair.
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