Haven't seen this reported anywhere else src: http://www.asx.com.au/prices/market-news-detail.htm?an=DJDN000020131023e9an0000s
"The RBA now has more capacity to absorb unforeseen losses on foreign-exchange and bond holdings," said Sally Auld, a interest rate strategist at JPMorgan Chase & Co in Sydney. "This will make some people consider whether the RBA are about to meaningfully up their foreign-exchange reserves or intervention." Shock Absorber Sounds like their preparing for the inevidable
Nah Just banksters doing what banksters do,......... steal from the poor and Pi$$ it down the drain. :lol: Keep stacking Kind Regards non recourse
Some interesting background in today's papers. I loved the line "If the treasurer hadn't read page 103 of the annual report, he either didn't understand his job or he was taking a very huge risk with the Australian economy with a one-sided bet." Ex-Reserve Bank board member Warwick McKibbin accuses Wayne Swan of economic vandalism I'm still confused about why the issuer of currency - who regularly increases the monetary base - needs the Government to take out a loan from others to give currency back to them.
Maybe the idea is that they can't actually use any of what they create? Like a protection against what happened in the US where the fad just handed out billions around the world lol.
Good point, it's probably the look of the thing. Helps avoid a technical insolvency through realised asset losses.
Had a look at the RBA site, and it still has its 'Reserve Assets' at over $50 Billion. Not sure about the market valuations. OC
The government can only borrow by issuing bonds and securities etc to get private money, not by borrowing it from the RBA.
Very confusing, I could only surmise myself that whoever is the beneficiary / share holder of the RBA is not happy with the lowering of the interest rates as it has effected their bottom line / profits. Now to make up for the shortfall without raising the real interest rates they have put pressure on the Government to borrow more cash at interest and lend it back to them at no interest. This will effectively then make up for the shortfall in their profits by taking in from the Tax Payer. Expect some new creative taxes to be invented soon.
Section 51 (xiii) of the Commonwealth of Australia Constitution states, Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to, (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; Therefore the Government if it chose to do so could issue money without debt for the building of infrastructure ect, although it however chooses to borrow money at interest which in turn leads to higher taxation. I guess they would be hesitant to do so if history is any thing to go by, Hitler issued government issued currency independent of a bank interest free and built up Germany to be a power house economy, after the disaster of the Weimar Republic hyper inflation years prior. And we all know what happened there. President Lincoln issued government issued currency called green backs, independent of a bank interest free, and he was assassinated. President James A Garfield had similar belief's and he was assassinated On June 4, 1963, President J F Kennedy issued an Executive Order which called for the issuance of new currency, it was to be issued debt and interest-free. He was also assassinated So it appears that those who were brave enough to issue debt free currency didn't have a long and lasting life.
