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RE: Can Anyone Actually Tell Me What "MONEY" Is?
Money is a claim over resources - whether contractual or implied. I like my gold and silver however in a well run economy / society fiat should work - the problem is the governments and banks print currency diluting the claim over the resources - ultimately ending in failure - my two cents worth anyway Silverbug.
You are dead on sirknight, the ultimate cause of any failing of a currency, is it's controllers, always has. Cheers
In a first world country, there's very little correlation between a growing money supply and inflation. It's disproportionate eg 10% growth in money supply leads to only modest 1-3% inflation. Also banks tend to create more money than the government. I think that's the biggest crime - the banks can create money, yet we have it drummed into us that our governments have to fund spending through borrowing. Mainstream economists are only now starting to admit that banks create money through lending.
Thanks for your response. That 1-3% inflation rate, are you talking about the doctored (official) numbers that the government puts out to keep down their costs? Governments don't create any money, they borrow it or steal it, they create bonds. So yes the banks do create all the money out of thin air. That's my understanding. Cheers and thanks.
Both governments (through their Central Banks) and private banks (through lending) create money. When the Australian government spends, money is created. When it taxes, money is destroyed. The government does not need to issue bonds in order to finance its spending activities.
Re: inflation figures - where exactly have Australia's CPI figures been cooked? There is a lot of valid criticism re: the jobs numbers, but inflation not so much.
Competitive price pressures, an economic crisis and lack of private sector wage growth have led to persistently low inflation in most developed nations. Exception being the UK, where inflation has been picking up substantially on back of aggressive decline in the pound.
Cheers