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In Question System and Industries Lost Explained in Brief (Draft) |
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There is often talk of ‘the great contribution to ‘Monetary An independent monetary system is ensured by keeping
foreign receipts and payments equal. The more Thus not only is there no gain to the nation’s total income from export earnings, export growth also undermines domestic industries. It is questionable
as to whether the income ‘earned’ by exporters is adequate compensation to
the nation for the consequent loss
of domestic industries; and the trade, businesses, jobs associated with them, and the lower
multiplier effect. It is possible that under the current ‘Independent’
monetary system, the more that Originated
October 2020 However, Australia must not only pay for its imports, it
must pay for services from foreign countries such as freight, travel as well
as financial services such as dividends and interest on debt. As foreign investment and foreign debt increases in Therefore, under the independent monetary system, such a trade surplus
does not mean that the situation has improved. It can mean that
we must now export more to service our rising debts, leaving us less money to
spend on imports. Therefore,
a trade surplus can mean that the situation has become worse. Originated 5
February 2021 For more details in regard to the above insights go to: |
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Buoyant
Economies Submission to the Financial System Inquiry - This last observation is interesting in
the light of recent revelations about bank
misdemeanours: The Royal Commission into Misconduct in the Banking …. Industry 2019 comes to mind. (??) Also of some relevance in this regard are
the fines by ASIC & AUSTRAC 2014 to 2020 (The Sydney Morning Herald article of 24 Sep 2020 by Charlotte Grieve “How Westpac's
record-breaking fine compares to others” offers comment in respect of this matter.)
??? What is to say that any sense of ‘self serving’ and ‘entitlement’
(& greed?) that was associated
with these offences was not ‘at play’ in the banks gaining and
maintaining the position of privilege
that they have in the Australian economy as the “only source of
monetary growth’ (i.e. bank lending) courtesy of the ‘Independent Monetary
System’??? ( The profitability associated with this privileged status as the “only
source of monetary growth” is greatly facilitated
by the banks being able to, in
effect, ‘print money’. As is the case with the money that is made
available by a bank to you, as a borrower which “didn’t exist until it was credited to your account”.
(Bank of England ‘How Money is
Created’ refers). In any case, it would seem (from Para 3.6 quoted above) in adopting this ‘independent’ monetary
system that “the great contribution
to If made aware, many people might see the failings of ‘ “Isn’t the Banking Sector supposed to be
serving the Nation, instead of the other way round”?? They might also say: Surely, and trustworthy monetary system ??? The incredulous might exclaim: “No
growth in national income from our exports”?! “We lose domestic industries, businesses,
and jobs”??! “We in effect give away
our iron and coal to foreigners”???!
“But we gain lots of big holes in the ground”????! and “We’ve been ‘selling-off
the farm’ to foreigners to raise capital” ????? !!! Another might query: “How can this ongoing damage
to our nation’s economy be allowed to continue? and “Is it the result of a breach
of duty”?? Perhaps those
that have lost their livelihood in consequence of this system might say a
lot more? Restrained questions from
that quarter might be: “Why are currency being knowingly
allowed to cause them to be uncompetitive against imports”?? and “Who is it that facilitates
this – Who is culpable”??? and How come India
now adjusts its exchange rate to ensure that its domestic industries
are competitive against imports, but
and “Why is it that and
their economy seems to have done so much better than the many countries that didn’t “?? However, there is talk that action has recently been taken in But still the incredulous have reason to
ponder: “38 years of institutionalised attrition”
?? and “38 years of Industries, Businesses, and Jobs being eliminated, -
But the Banks have been ‘making a mint’” ??? or perhaps “WHAT!
38 years of
Industries, Businesses,
and Jobs being
eradicated, & our Mineral Resources virtually given away - to
foreigners ! - But the Banks have been
laughing all the way” ??? A more objective observer might ask:
“Has any relevant national authority recently (or ever) done a system / costing analysis or audit of this
‘independent’ monetary system and
the way it is managed, & in comparison to RBA charter objectives[2], and the previous system replaced in 1983?” To
which a supporting inquiry might be: |
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Didn’t the previous system yield 5%
growth per annum?? The more observant might also ask[3]: “Why isn’t the exchange rate more competitive? Perhaps 0.58 and “Surely the ‘powers
that be’ want the prosperity that
a competitive exchange rate would bring to and another respond: “Wouldn’t the farming industry want their export revenue to increase by 25%”? and a citizen of the state
of South Australia demand: “What about the
benefit that can result from Whyalla
Steelworks being made internationally
competitive by a more favourable exchange rate? - The many jobs
associated with it?? - The flow-on
effect for the city of & the nation”???!! ****************************** The puzzled, the incredulous, the
observant, the objective, and the victims of the present system might
all reasonably ask: Why isn’t
the monetary system, one that sets an exchange rate that is reliably stable, dependable, and internationally competitive? (Instead of an unstable variable exchange rate system since
1983 that enables one sector of the economy to profit from exchange rate
volatility – An arrangement that suggests indifference
to wider national needs and the Central Bank’s Charter?) Why isn’t
the monetary system, one that enables the accumulation of foreign reserves to facilitate strong
national economic growth? (Instead of one that
facilitates national indebtedness and the problems associated with
it?) Why isn’t
the monetary system, one that primarily serves and benefits the wider national interest? (One
that encourages the prosperity of productive domestic and export
industries, and the businesses and the jobs associated with them?) ****************************** Aside
from that, there are a few more
questioning observations that might be put.
A Better, More Equitable, Impartial, and
Trustworthy Monetary System? It would seem that ·
One
that develops monetary policy? ·
One
to whom the Central Bank would be accountable? ·
One
that encourages an exchange rate that favours ·
One that has representation from each
state??? and ·
One
that is not naturally
linked directly to; and biased in favour of one sector of the
economy! An example of such an organisation is the ‘European
Commission’ as described in ‘Saving the Euro’ by Leigh Harkness, Part 7,
Managing the Process to the Optimum Exchange Rate System (Pages 59 to 84), http://www.buoyanteconomies.com/SavingTheEuro.pdf . A Matter of Curiosity For much of 2021 so far, the exchange rate for the Australian dollar
has been caused to hover around $ 0.77 US. Intriguing!
Note: This page is intended to provide a window
into the considerable knowledge, experience, understanding, research, and hard work evident at the Buoyant Economies website e.g The guided exchange
rate and liquidity system http://www.buoyanteconomies.com/Guided_exchange_rate_system.htm
Updated 13 June 2021 JG |
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1 Christopher
Joye, Financial Review 29 Jan 2021
2 RBA Charter objectives:
a. the stability of the
currency of
3 This section added 10 March 2021
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