Andy’s ‘Submission to the Senate Inquiry on Bank Separation’.

Submission to the Senate Committee into Banking System Reform (Separation of Banks) Bill 2019

By Andrew Jack Chalkley. 72 Eton Street, North Perth, Western Australia 6006

In Australia, we have a problem. Only 3.5% of our money is created as cash currency by the Reserve Bank — some $74 billion. [1] The rest — 96.5% — is created as ‘credit’ by Commercial Banks when they make loans — some $2017 billion. [M3-Currency] [1] The loans are mostly issued using land as the backing for the loans. This land ‘ownership’ system has been remarkably successful over the last few hundred years at propelling Western economies. Similar is now propelling China. There is a downside. The credit is created with an equal amount of debt. The debt magnifies to exceed the volume of credit. This credit is what we see as bank balances in our bank accounts. So a massive instability has been created in that there is ‘more debt than money’ — a topic not much studied — a topic ‘avoided’. Read more