Why are Governments borrowing money from foreign owned banks, when in Section 51 of the Australian Constitution, Governments have the legal right to create their own money for public funded projects with zero interest, just like the Nullarbor rail line was built.

Better still. Why is the public and the media not holding these incompetent pollies accountable for this?

Where does our constitution say this?

Section 51  (12) and especially (13): "...the issue of paper money."

Australian Constitution - Section 51 - Legislative powers of the Parliament
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:-

(i.) Trade and commerce with other countries, and among the States:

(ii.) Taxation; but so as not to discriminate between States or parts of States:

(iii.) Bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth:

(iv.) Borrowing money on the public credit of the Commonwealth:

(v.) Postal, telegraphic, telephonic, and other like services:

(vi.) The naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth.

(vii.) Lighthouses, lightships, beacons and buoys:

(viii.) Astronomical and metereological observations:

(ix.) Quarantine:

(x.) Fisheries in Australian waters beyond territorial limits:

(xi.) Census and statistics:

(xii.) Currency, coinage, and legal tender:

(xiii.) Banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money

(xiv.) Insurance, other than State insurance; also State insurance extending beyond the limits of the State concerned:

(xv.) Weights and measures:

(xvi.) Bills of exchanging and promissory notes:

(xvii.) Bankruptcy and insolvency:

(xviii.) Copyrights, patents of inventions and designs, and trade marks:

(xix.) Naturalization and aliens:

(xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth:

(xxi.) Marriage:

(xxii.) Divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants:

(xxiii.) Invalid and old-age pensions:

(xxiiiA.) The provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances:

(xxiv.) The service and execution throughout the Commonwealth of the civil and criminal process and the judgements of the courts of the States:

(xxv.) The recognition throughout the Commonwealth of the laws, the public Acts and records, and the judicial proceedings of the States:

(xxvi.) The people of any race, for whom it is deemed necessary to make special laws:

(xxvii.) Immigration and emigration:

(xxviii.) The influx of criminals:

(xxix.) External Affairs:

(xxx.) The relations of the Commonwealth with the islands of the Pacific:

(xxxi.) The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws:

(xxxii.) The control of railways with respect to transport for the naval and military purposes of the Commonwealth:

(xxxiii.) The acquisition, with the consent of a State, of any railways of the State on terms arranged between the Commonwealth and the State:

(xxxiv.) Railway construction and extension in any State with the consent of that State:

(xxxv.) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State:

(xxxvi.) Matters in respect of which this Constitution makes provision until the Parliament otherwise provides:

(xxxvii.) Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law:

(xxxviii.) The exercise within the Commonwealth, at the request or with the concurrence of the Parliaments of all the States directly concerned, of any power which can at the establishment of this Constitution be exercised only by the Parliament of the United Kingdom or by the Federal Council of Australasia:

(xxxix.) Matters incidental to the execution of any power vested by this Constitution in the Parliament or in either House thereof, or in the Government of the Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth.

culldav wrote on Sep 8^th, 2010 at 10:59am:

Why are Governments borrowing money from foreign owned banks, when in Section 51 of the Australian Constitution, Governments have the legal right to create their own money for public funded projects with zero interest, just like the Nullarbor rail line was built. Better still. Why is the public and the media not holding these incompetent pollies accountable for this?

Printing money by the reserve bank and incurring interest on that money devalues the currency and creates inflation. The Government is trying to keep inflation low so maybe that's why they are borrowing other countries worthless bits of paper ;)

"create their own money for public funded projects with zero interest,"

I don't read that in the Australian Constitution.

How many 10's of Billions of dollars are the Australian tax payers paying back in interest on that so-called foreign worthless bits of paper?  

Wouldn't it have been in the best interst of all Australians not to have to pay back any interest?   Afterall, you did say that interest causes inflation.

Ernie, the Costitution is quite complicated, but the Australian Government DOES have the legal ability within the Constitution to make its own money and use that money for public projects without interest. Section 51 (13) states it can issue paper money.

Watch the following link. It will be the best 36 minutes you will spend.

It explains in basic language what the constitution is about.

http://www.youtube.com/watch?v=JihQw39hyG0&feature=related

The Reserve Bank is a foreign owned bank since 1960.

The Constitution says that the government SHALL print money, to facilitate commerce.

Conventional wisdom says that the government SHOULD NOT do this without regard to economic stability.

The Reserve Bank of Australia came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank to it.

Ernie

How is the Australian tax payer paying back 10's of billion in interest to foreign owned banks economically stable?  Considering the Government has the legal right to create money for public works projects without being charged interest.

Surely those 10's of billions of dollars in interest charges the Australian tax payers are paying back to foreign owned banks would be spent by creating infrastructure like schools hospitals and so forth.

Why give those $billion to foreign owned banks in interest charges, when we don't have to.  

culldav wrote on Sep 8^th, 2010 at 11:42am:

Ernie How is the Australian tax payer paying back 10's of billion in interest to foreign owned banks economically stable?  Considering the Government has the legal right to create money for public works projects without being charged interest.

The reserve bank will always charge interest on its worthless bits of printed paper. That is part of the scam ;) Wasn't it JFK who tried to get rid of the Federal Reserve bank ? Look what happened to him :(

The Australian pollies have acted like traitors to the Australian people. They removed the central banking functions from the Commonwealth bank, and gave a foreign owned bank banknote issuing authority over the making of Australian currency.

Definately a scam, but how many Australians know its a scam, and what would they do if the majority found out about it.

The sad thing about all this is that these bastard pollies know about it, and keeping its peole in economic slavery because they are too gutless to do anything about it.

Please delete wrote on Sep 8^th, 2010 at 11:36am:

The Constitution says that the government SHALL print money, to facilitate commerce. Conventional wisdom says that the government SHOULD NOT do this without regard to economic stability.

In overly simplistic terms:

• Australia is worth a certain amount (net worth).
  
• We print a given number of dollars.
  
• Each dollar is backed by a certain fraction of our net worth.
  
• We print more dollars.
  
• The value of net worth behind each dollar decreases.
  
• Each dollar therefore buys less (we need more dollars to buy what we did before printing more of them).

That's one of the mechanisms behind inflation.

Not technically correct (the value of the nation isn't static, for example, and there isn't a strict 1 to 1 relationship), but near enough.

Printing money to generate government revenue is a bad idea.

If you are borrowing money, you should shop around for the best deal. People complain about the big 4 banks ripping them off with fees etc. So don't use them.

Why some people would prefer their tax dollars paying back interest on foreign loans is simply beyond belief.

Wouldn't every dollar created for certain projects also increase and add value to Australia through those porjects being created.

culldav wrote on Sep 8^th, 2010 at 11:36am:

The Reserve Bank is a foreign owned bank since 1960.

That is incorrect -
1. What is the Reserve Bank of Australia and who owns it?
The Reserve Bank of Australia is Australia's central bank. Its role is set out in the Reserve Bank Act 1959. The Bank conducts the nation's monetary policy and issues its currency. It seeks to foster financial system stability and promotes the safety and efficiency of the payments system. It also offers banking services to government.
The Bank is wholly owned by the Australian Government, but is not a government department. For more information see about the RBA.
Link -
http://www.rba.gov.au/qa/role.html

Quote:

Why some people would prefer their tax dollars paying back interest on foreign loans is simply beyond belief.

Not exactly. Just about every Australian businessman has some debt. Who you owe it to doesn't really matter. Why should a government be any different?

Whether you pay upfront or pay interest, you still end up paying for what you get.

# wrote on Sep 8^th, 2010 at 3:34pm:

Please delete wrote on Sep 8th, 2010 at 11:36am: The Constitution says that the government SHALL print money, to facilitate commerce. Conventional wisdom says that the government SHOULD NOT do this without regard to economic stability. In overly simplistic terms: Australia is worth a certain amount (net worth). We print a given number of dollars. Each dollar is backed by a certain fraction of our net worth. We print more dollars. The value of net worth behind each dollar decreases. Each dollar therefore buys less (we need more dollars to buy what we did before printing more of them). That's one of the mechanisms behind inflation. Not technically correct (the value of the nation isn't static, for example, and there isn't a strict 1 to 1 relationship), but near enough.

Maybe not, but for the sake of this discussion, your description is more than adequate!

Our $ is backed by what others perceive its value to be and if we simply print more, then the value of what the OZ$ will buy overseas and what investments are put into OZ from overseas, will be De-valued commensurately!  

There is only one country who is even remotely in a position to try printing its way out of Debt and that is the USA.

That said, even in their favoured position as the Global currency, if they try to "use" that position, they WILL GET BURNT, as is actually already happening!

Governments get the most out of their money by taxing those living under its jurisdiction. However, several times the amount of money spent by the government exceeds the amount of money available. It was then when governments begin to accumulate debt. These debts can come from the wars, the improvement of national health care, and the government provides services and other activities.

culldav wrote on Sep 8th, 2010, 11:36am:
The Reserve Bank is a foreign owned bank since 1960.

That is incorrect -
1. What is the Reserve Bank of Australia and who owns it?
The Reserve Bank of Australia is Australia's central bank. Its role is set out in the Reserve Bank Act 1959. The Bank conducts the nation's monetary policy and issues its currency. It seeks to foster financial system stability and promotes the safety and efficiency of the payments system. It also offers banking services to government.
The Bank is wholly owned by the Australian Government, but is not a government department. For more information see about the RBA.
Link -
http://www.rba.gov.au/qa/role.html


If the Australian people or the Australian Government OWN the Federal Reserve Bank, they why is the Government not borrowing money from them instead of borrowing the money from China and other countries?