Showing posts with label notes. Show all posts
Showing posts with label notes. Show all posts

Polymer Notes are a Loss

The invention of the polymer banknote was a disaster for Australia. Costs involved in continually replacing them is enormous. Let's face it paper and cloth are quite substantial materials. They can stand up to a lot of wear and tear. The main problem with polymer is that once folded it cannot be straightened out - a permanent crease prevents stacking of notes by banks and neat storage in consumers' wallets.

All ATMs give brand new notes. It is impossible to do otherwise because they need to be tightly stacked. You would be wasting your time just trying to put used fifty dollar bills into an ATM.  Replenishing ATMs is a major cost in the modern age.  Government should be looking to save costs here.

Considering the saving from fewer forgeries is a pitiful A$50 million, the extra cost is not worth it. Anyway, if people get a forgery they always pass it on, as giving it to a bank results in nothing in return.  Government should take the loss for forgeries.  Then people would hand them in.

The issue of durability is still a big government lie. As noted above they do not last longer: they become unusable after first use and fold. It is amazing how government blindly accepts a new idea for the sake of it when it is a big expensive white elephant.
Science by Ty Buchanan
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Piano Dog

"I'll knock out a tune for you."
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Funny Animal Photos
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Pensioners Hoarding Is a Witch Hunt

I live and spend money in Australia. Rarely do I get a $100 note in change. Indeed, the economy seems to be flooded with $50 bills. Most people carry a wallet full of them. Despite being completely ruined if folded (they keep the crease for ever), the government keeps destroying the old and releasing new $50 notes.

Now, for someone like a former Reserve Bank official to make the absurd claim that pensioners are hoarding their savings in $100 bills in order to keep their pensions, really takes the cake. What fox hole does he live in? It is just as easy to hoard in fifties as it is in one hundreds, particularly when they come brand spanking new from ATM machines.

Peter Mair is so sure he is right that he is writing to Reserve Bank governor Glenn Stevens. He wants pensioner discounted car registrations, council rates and discount phone rentals stopped forthwith. Ask for a pensioner discount on your telephone line rental and you'll get a belly laugh back. It just does not happen. You can put down you have broadband, but Social Security wants to see a copy of the actual account before you to get a few dollars extra from them.

Make it harder to hoard, Mr Mair says.  Print dollar bills again and don't circulate large denomination notes. The result would be people pushing wheel barrow loads of cash around to do their weekly shopping.  It would take a bold Australian government to adopt the "cashless" society system of Singapore. Though Australians use cards for most transactions many still like the idea of cash in their pockets. Peter Mair thinks the feel of cash can be met by leaving metal coins in circulation. If he would just look around the shops he would find people at checkouts trying to dump the heavy pocket loads of valueless coins for notes.
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Who Do We Owe Money To?

Everyone is in debt. That seems to be the case. But if we all owe money to whom are we indebted? Who are these fat cats who spend their days on the beach having cool drinks brought to them while they while away the time sunbathing?

If truth be known the money does not actually exist. It has been created in the books of independent and national banks. In centuries passed the local blacksmith acted as the bank. Gold, silver and promissory notes were left in his safe. He soon became aware that the "goods" left for safe keeping would not be taken out by the owner for a very long time, if ever. For storing the valuable minerals and promissory notes he gave promissory notes in return. This meant that he could create money. He could also give loans, a large part of which would return directly back because the debtor opened a new account.

When large private banks started, governments gave an assurance that a run on an institution would be protected by public money. We have seen how silly this concept has proved to be by the US and European governments bailing out private banks. Private debt has become public debt. This on top of the mushrooming private debt worldwide.

Much of Western debt is owed to China which buys US bonds. It is a mistake to believe that it wants the money back any time soon. If it did the world economy would grind to a halt. Then, who would buy its exports?

The real problem is economics. This social science is just theory. There are complicated models that do not apply to the real world, with demand and supply curves, meeting long term average costs and so on. Real business doesn't operate that way. There is not one model for cost plus 10 or 20 percent, or get it cheap and sell high until demand stops then throw the stuff out. That is how business really runs. Note the supermarkets, they don't cut the price of everything that doesn't sell. They would rather throw it away than sell it. After all, they make the supplier take the loss. Economic advisers have not helped one government to balance the books. And the advice they are giving now to raise taxes and cut spending will surely prolong the recession. Cutting debt is like turning the water tap down - someone has to go without! Let's be honest much of this debt will never be paid. It doesn't really exist.
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