By Andrew Mackinnon
The economy in Australia was going very badly last year before the bushfires started that the government lit to distract attention away from the failing economy and before the latest Coronavirus hysteria to provide a scapegoat onto which to project the blame for the failing economies all around the world. In Australia, the banks create money when they lend and then charge interest on it. This is the same in most countries around the world. However, the citizenry is waking up to this scam and is therefore reluctant to borrow from the banks. This has caused the size of the money supply in Australia to decrease since money is created when the banks lend and since money is destroyed when principal lent by the banks is repaid. As a result, there is insufficient money in circulation to support economic activity in Australia. This is why the economy is languishing.
In fact, Australian citizens were reluctant to borrow from
the banks even back in the 1990s in the aftermath of the recession of 1989 to
1991. The Australian government has
always responded to this reluctance not by acknowledging that the interest
charged on money lent by the banks that they create out of nothing is
unconscionable and unjust, but by bringing new citizens into Australia via mass
immigration in the hope that they would borrow from the banks to make up the
shortfall in borrowing. It has been
doing this for the past thirty years. We
are now in a situation where the Chinese who have come into the country don’t
want to be in debt; the Indians who have come into the country don’t want to be
in debt and the existing Australian citizens certainly don’t want to be in debt
either. Nobody wants to be in debt and
why would they? People are not stupid,
even if the Australian government and the Jewish-controlled media have
deliberately made it very difficult to understand how the banking system in Australia actually works.
In Australia, when banks lend
for any purpose, they create that money and the size of the money supply
subsequently increases. The banks debit their loans asset account for the
amount lent to signify the debt owing to them and they credit their deposits
liability account to provide their customers with the amount they have lent to
them so that their customers can utilise those funds in the bank accounts that
they hold with the banks. When principal
lent by the banks is repaid, the customer’s deposit account out of which the
payment is made decreases by the amount of the principal repaid so that the
money supply in Australia decreases by this
same amount. The customer also makes
interest payments out of his or her deposit account in the course of repaying
the money borrowed. These payments are
credited to the revenue account of the bank that lent the customer the money
and are used to pay the salaries of bank employees, with the remainder
constituting the bank’s profit, out of which dividends are paid to the
shareholders of the bank so that they can share in this interest revenue also.
The Reserve Bank of Australia was established in 1959 via the Reserve Bank Act. It commenced operation early the next year on 14th January, 1960, just over 60 years ago. The purpose of the Reserve Bank of Australia has always been to maximize the interest revenue collected by the banks under its authority, which were first publicly owned then later privately owned by shareholders.
In 2015, in Australia, which had a population of about 24 million people at the time, about $30 billion dollars was paid to the staff who run the banks and another $30 billion was earned in profits for the shareholders of these privately-owned banks, all courtesy of the fraud of interest charged on money created out of nothing and lent to the citizenry. That’s a total of $60 billion in one year paid in interest to the banks by Australian citizens on money that the banks created out of nothing and lent to them. It’s the equivalent of $3,185 paid in 2015 by every adult citizen of Australia aged 18 years and over to the banks in interest. Around 78.5% of the population of 24 million in 2015 was aged 18 years and over, being around 18,840,000 citizens.
97% of the money in circulation in Australia, constituting the
money supply, is money created by the banks when they lend for any
purpose. The other 3% is physical notes and coins. The majority of
this 97% arises from mortgage lending. The majority of the money that
banks create is the result of mortgage lending. Mortgage lending
constitutes the majority of bank lending.
When a bank lends money to a customer as a mortgage with which to
purchase real estate, the customer pays the overwhelming majority of the amount
borrowed to the seller of the real estate that the customer chooses to
purchase. Apart from stamp duty paid on the
real estate purchase by the customer to state governments, commissions paid to
real estate agents on the sale of the real estate by the seller and perhaps
renovations of the real estate purchased, carried out by the customer using
part of the money they have borrowed from the bank to fund their purchase of
the property, the only way that newly created money as a result of mortgage
lending is going to make its way into the economy and into the hands of
Australian citizens is if the seller whose house has been purchased as a result
of that mortgage lending spends the money they receive as a result of selling
their house. If they predominantly invest the money in assets such as
real estate or shares, then the majority of the money is not going to find its
way into the economy involving the day to day transactions of the majority of
Australian citizens.
This problem has been even further
exacerbated by the inflation of house prices as a result of increased demand
for housing via mass immigration and via concessions made to property
‘investors’ (who borrow from the banks so that they can ‘invest’) via negative
gearing so that they will be able to afford the repayments on their mortgages
for their ‘investment’ properties, which they otherwise wouldn’t be able to
afford. They wouldn’t otherwise have sufficient cash flow to afford the
repayments. As a result of the inflation of house prices, the proportion
of money in circulation in Australia as a result of
mortgage lending by the banks is even higher.
In Australia, we need a money
supply in which a large proportion of the money supply didn’t come into
existence as a result of lending. There are activities that occur on a
regular, consistent and ongoing basis in order to support the lives of Australia citizens, such as
the growing and distribution of food, the production and distribution of
electricity and the accumulation and distribution of water and gas, to name
just a few. These activities need to be supported by a large proportion
of the money supply that didn’t come into existence as a result of bank lending
but instead came into existence as a result of government spending over time,
such as payment by the government of the salaries of citizens employed in the
public service in Australia.
The problem that many Australian citizens
are currently experiencing is that there is insufficient money in circulation
as a result of a decline in borrowing by Australian citizens from the
banks. In addition, the supply of money that is in circulation does not
offer stable support to their day-to-day economic activity. Because 97%
of the money in circulation is created via bank lending, the size of the money
supply is in a constant state of change. When principal is lent by the
banks, the money supply increases in size. When principal is repaid by borrowers,
the money supply decreases in size.
In contrast, money that is in circulation
as a result of government spending can only be taken out of circulation if the
government decides to destroy money that it has collected via taxation because
it believes that there is too much money in circulation which is causing
excessive inflation of prices.
The way money is created in Australia needs to
change. The Australian government should be responsible for money
creation, not the privately-owned banks.
The size of the money supply in Australia shouldn’t depend on
citizens borrowing money. The only
entity that should have the authority to create money in Australia and control the
size of the money supply in Australia is the Australian
federal government which would create money via a publicly-owned Australian
Federal Bank by spending it into circulation or lending it to Australian
citizens or Australian businesses for any purpose, including mortgages.
The Australian Federal Bank would not charge interest when it lends, however it
would need to charge a rate in the vicinity of 0.5% to 1% on all lending to
cover the incidence of default on the loans by the borrowers. This rate
would be different for different types of lending, such as mortgages and
business loans. The sole purpose of this
rate would be to cover the incidence of default on loans (ie. non-repayment of
principal borrowed), not to profit from the lending.
There would have to be some mechanism for limiting government lending to the citizenry since the publicly-owned Australian Federal Bank would create all of the money that it lends so that the money supply increases when it lends. Unrestrained lending would lead to a rapidly increasing money supply and associated inflation of prices.
Citizens would be able to borrow in order to buy a house to live in and possibly a holiday house but they wouldn’t be allowed to borrow in order to buy a house as an investment to rent out in order to earn income. Investment would need to be funded out of savings, including houses and shares to name just two investments.
The amount that the Australian Federal Bank would lend to any given citizen for any given purpose, such as buying a house to live in, would be limited by factors such as the income of the citizen and the size of the deposit that the citizen has saved towards the purchase, with zero dollars obviously being the minimum possible size of the deposit saved. The Australian Federal Bank would decide upon the multiple of any given citizen’s income (such as three times) to lend to them for any given purpose, such as buying a house to live in or buying a motor vehicle.
If necessary, the Australian government
could also create money and bring it into circulation in order to increase the
money suppy by giving the money to the citizenry in proportion to the amount of
net tax they’ve paid during their lives, defined as tax paid minus money
received from the government in this manner as a result of money creation by
the government.
The Australian Federal Bank would be run on
a not-for-profit basis whereby the cost of running its operation would be
covered by transaction fees and account keeping fees that reflect the true
costs incurred by the bank to process transactions and maintain the accounts of
Australian citizens, Australian businesses and other entities such as
publicly-owned utilities, public service organisations and local government
areas.
There would no longer be any need for the
Australian government to borrow money by issuing government bonds to those from
who it borrows, as is currently the case.
This borrowing needs to repaid with interest (ie. principal and
interest) out of taxation revenue, paid by the citizenry, when the Australian
government could easily create this money to fund its spending requirements
without requiring the citizenry to repay it via taxation or pay interest on it
via taxation.
Our current predicament in which
privately-owned banks create money out of nothing when they lend and then
charge interest on it is a Jewish fraud whose perpetrators are committed to
protecting it at all costs. The
Coronavirus hoax has been instigated worldwide in order to provide a reason for
the failing economies around the world which draws attention away from the real
reason – insufficient money in circulation in countries all around the world as
a result of insufficient borrowing from the privately-owned banks by citizens
in countries all around the world who rightfully view the banks with distrust
and disdain.
Providing a sound monetary system for the
citizenry is one of the most important services that a sound government is
obligated to provide. There is
absolutely no reason whatsoever why any money in circulation should obligate
citizens to pay interest on it, whether interest to privately-owned banks or
interest to bondholders. When citizens
pay interest to privately-owned banks as a result of money borrowed, they
receive nothing of value in return, because the money lent to them was created
out of nothing by the banks. This is a
cleverly-disguised system of slavery whereby the citizenry work to earn the
money required to pay the interest without receiving anything of value in
return for that money. The recipients of
the interest paid, being the bank employees and the shareholders of the banks,
use the interest paid to buy the goods and services that the citizenry produce
in the course of earning the money to pay the interest. This is a massive transfer of wealth from
those paying the interest to those receiving the interest. Over the course of repaying a mortgage on a
house, a borrower from a privately-owned bank under our current banking system
pays in the vicinity of 80% of the principal amount borrowed in interest to the
bank. This borrower repays the principal
amount borrowed and also pays an additional amount to the bank as interest
equivalent to around 80% of the principal amount borrowed.
If the principal amount borrowed is
$500,000, the total amount repaid to the bank over the life of the mortgage is
around $900,000. When the bank lent the
$500,000 principal, a bank employee processed the paperwork and typed the
$500,000 into a computer so that this money, created out of nothing with a few
keystrokes, was available in the account of the borrower. In return for this negligible amount of work
to lend the $500,000, the bank is repaid $900,000, which includes $400,000 in
interest. About half of the interest of
$400,000 is paid to bank employees as salaries and the remaining $200,000 is
booked as profit, out of which dividends are paid to the bank’s shareholders.
We have been living under slave conditions for decades now. The Coronavirus hysteria is intended to keep us in slave conditions by providing a reason for the failing economies around the world which distracts from the real reason – the Jewish fraud of interest charged by the banks on money created out of nothing when they lend. The Jewish perpetrators of the Coronavirus hysteria intend to start new monetary systems in countries around the world in the aftermath of this hoax which similarly enshrine this Jewish fraud as their centerpieces.