Why am I writing an alternative to modern economics when I’m not an economist? I’ll start with a personal story.

I grew up in a deeply religious family in a fringe Christian sect. From a very early age it did not make sense to me, either the teachings of the sect just the concept of religion. Whenever, I asked questions I was told that its about faith not making sense. Although I left the religion as soon as I was old enough the dogma stuck and I continually felt deeply guilty of rejecting religion. It wasn’t until my 30s that I could rid myself of the guilt.

In my 30s I decided to buy all the books on evolution, physics and cosmology I could and study the scientific basis for the origins of the universe and life. These books were the first real wave of science books that were written for non-scientists and mostly in easy-to-understand language so non-experts can grasp the science. I finally was able to understand that religion was not factually correct and that there is absolutely no way that God can exist in this universe or at least in this part of our universe. I didn’t need to be a religious expert or a highly educated scientist to gain the knowledge through these informative understandable books written by great scientists like Richard Dawkins.

In a sense economics reminds me of religion full of non-sensical concepts, belief factions, jargon and waring between different beliefs that really just try to justify differing results from the same set of data that is then turned into economic dogma to suit whatever opinion one has. As opposed to science I could not find economic books that challenged the basis of economics and mainstream conventional wisdom in plane simple language. There are great commentators on the internet but not in the mainstream. So I thought humbly that I could give a shot at writing about how economics or the money system works in easily understandable language.

The Money system is failing citizens in democracies through deceit and ignorance, but don’t despair the power still sits in the hands of those citizens through being able to chose our leaders. But first we must get rid of the beliefs and dogma and understand the facts to be able to objectively chose those leaders that benefit the majority of citizens.

What follows is a series of economic articles in simple form, that should enable any literate citizen to understand how the Money system works; how they are affected by the Money flow and how exploitation of ignorance of Money is an established business model. Rather than the confusing economic jargon and statistics spouted every day in the mainstream media by economists, politicians and journalists, how the Money flow affects all citizens provides a much better understanding of economics.

A long career in finance, technology and life has taught the author that most people misunderstand how the Money and banking system works. Not just ordinary citizens, but this also applies to the mainstream experts including bankers and regulators, who all demonstrate a collective ignorance. Conveniently that ignorance happens to benefit them, so perhaps there is some logic in the selective ignorance. Citizens need to be able to make informed choices and understand when a situation is being misrepresented, and how it is weighted against them. With knowledge comes power and with power comes change. As you’ll see, change is required. If we, the citizens, want that knowledge and power then we need to ‘follow the money’ rather than rely on jargon.

The representations on the Money system that the author has been taught or read over the years create painful sadness, being either a deliberate misrepresentation, ignorant or wilfully designed to keep most citizens misinformed. Because of these misrepresentations many citizens unknowingly vote against their own interests. Few are immune to this lack of knowledge. It’s remarkable how difficult it is to unlearn concepts that have been taught in schools and universities, or continually misrepresented in the public media. Inaccuracies become hard wired in. The author has wanted for some time to write a description of how the Money system works without prejudice and in a simple, understandable form. The following is the result. A series of articles called ‘Money for the Masses, Economics for Everyone’. I don’t expect everyone (or perhaps anyone) who has an opinion on the topics covered to agree with the content. These are not the ravings of an insane person but a description of how the system works without prejudice. Yet the flow of misinformation is deep, so changing that masses misunderstanding will be a difficult task.

Topics to be covered in Money for the Masses, Economics for Everyone include:

1. What is Money?
2. Where does Money come from?
3. How money circulates and the importance of Citizens
4. The taxation system and why tax money circulation is vital
5. How do banks work and how Too big to Fail banks are carried by citizens,
6. Housing as a speculative asset, and other stores of value that citizens desire,
7. What is Rent seeking and why is it detrimental,
8. What is productivity and why is productivity so important
9. Australia’s trade and current account with the rest of the world. Why is the external account so important,
10. The superannuation system, good for some but not so good for most
11. Immigration, how does this effect the Money system?
12. Interest rates: the good, the bad and the ugly
13. Foreign Investment and the Money Supply
14. Inflation, jargon that’s meant to sound meaningful, and how that affects Money.
15. GDP, the most quoted economic statistic, does it mean anything?
16. How you, the citizens, hold the Money system on your shoulders and locked in place.
17. More to be added

The format is to cover each topic in understandable language with as little jargon as possible. It’s not meant to be an academic analysis, rather an understandable explanation of how things work in the least words possible. Each topic contains easily interpretable rules that will allow the reader to better understand Money, its circulation, how the Money system is held together and explanations of other economic misconceptions.

Every day economic terms like GDP, inflation, economic growth, recession and unemployment are thrown around. What do they mean for most citizens? Citizens are primarily interested in how much Money they earn from their efforts or investments, and what that Money can buy to meet their needs and wants. Following the Money trail can answer the question of what economics means for citizens far better than misused economic jargon.

Each topic covered will generate simple rules from the discussion on how the Money system operates.  On occasion, detail and exceptions may be left out of the articles to keep the fundamentals simple and understandable.

Lastly for this introduction, Money is part of society’s necessary infrastructure. How that Money infrastructure operates should be totally transparent. It’s not. However, if you follow the Money, it’s possible for all citizens to work out who’s doing what to who, and even why.

Glossary of Financial Terms

APRA: Australian Prudential Regulatory Authority that regulates the banking system. Important because APRA is indirectly responsible for how Money is created by banks.

Central Bank: The Reserve Bank of Australia is central to the Money creation system and is the banker to the privately owned banks. It also sets short term interest rates. See Chapter 2

Deposits: Loans to a bank that does not have special conditions and can be used for Money transactions.

External Account: Australia’s accumulated current account with the rest of the world. It includes the net of loans and investments into and out of Australia and determines how much Money Australia needs to create or borrow to fund any negative balance.

Foreign Investment: Purchase of or investment in Australian assets by foreign buyers and loans from foreign lenders or investors to Australian entities.

GDP: Gross Domestic Product is defined in Chapter 15

Government: The federal government of Australia that has direct Money creation powers and the power to create Money through the Central Bank. It also has banking powers under the constitution.

Immigration: Permanent and temporary voluntary immigration of people into Australia. Excludes refugees:

Inflation: Defined in Chapter 13

Interest Rates: Defined in Chapter 12

Bank Liquidity: Access to Money to meet payment obligations. Banks may have an excess of assets (loans and mortgages) over deposits (debt) but also may have a lack of liquidity due to a lack of easy access to Money to meet its debt payments.

Megabank: For the purposes of description and simplicity Megabank has been created to represent the total Australian banking system including major banks (CBA, NAB, Westpac, ANZ), smaller banks, customer owned banks and the Central Bank.

Money; Defined in Chapter 1

Productivity:  Defined Chapter 8

Rent seeking: Rent seeking is an economic concept that occurs when an entity (person or corporation) seeks to gain added wealth without any reciprocal contribution of productivity. Rent seeking does not refer to owning residential property that is rented and provides productive accommodation. Defined in Chapter 7

Superannuation: Australia’s compulsory and voluntary superannuation system that was designed to provide for a citizen’s retirement.

Too Big To Fail: TBTF is the doctrine that certain organizations become too important to the financial system that they cannot be allowed to fail. Mostly these are banks or insurance companies.

1%ers: Refers to the small section of the population that owns most and an inequitable portion of the assets, wealth and Money of Australia. Its not a literal 1%.

99%ers: Refers to the citizens that are not part of the 1%ers but contribute greatly to the Australian economy and Money system.

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