The functionality of our system is maintained only by the states implicit assurance that fiat money will be kept in sufficiently scarce supply. So it is odd for citizens who must hold that money to be denied a way of storing it with complete security at the going interest rate.

I’ll go out on a limb here, but there is no particular assurance that our fiat money will be kept in short supply, nor is there any great link to the functionality of our system. Yes, I agree that when inflation hits Robert Mugabe proportions there is a big problem, but the “fiat” in our money is that government dollars must be used as the medium of exchange, there is no particular fiat that government dollars must be used for the purpose of wealth storage.

Sure, we need to keep a few thousand dollars in a working bank account (typically at ZERO interest) for day to day buy and sell, but that is all just exchange. From a wealth point of view those working accounts are irrelevant. If you happen to believe in gold standard then go ahead and spend your investment money buying gold, if you believe in BHP or CBA then buy shares — for Australians, the investment market is still reasonably free, so we each make decisions about what we believe is the most stable asset (including government bonds if that seems competitive).

I’ll go even further out on a limb and say that there is nothing odd about citizens being denied high security storage of their money at a high interest rate (although the investment bank accounts out there are actually competing pretty hard for citizen’s money right now, so the market is filling this need, let’s ignore for the moment that you get taxed on the interest so you really earn half what it seems you are earning).

Think about it this way: suppose the government stops printing dollars and instead prints “Time Independent Monetary Units” which look a lot like dollars but are actually redeemable for dollars (at any time) with the inclusion of an interest calculation on the TIMU to $ conversion. Today, 1 TIMU is redeemable for $1 but next year the same TIMU will redeem for $1.10 or similar. OK, now people get to enjoy the TIMU so the dollar goes into disuse, but really the TIMU is only based in value on the dollar anyhow so really people are exchanging dollars and collecting interest at the same time (everyone still with me, I hope).

What I’m getting at here is that all the TIMU’s increase in dollar value together, so in effect there is no increase in value at all. We have discovered that money does not create wealth (hopefully we already knew that), money is only a token to annotate the wealth. Thus, the purpose of interest is not creating more wealth (because money cannot create wealth), the purpose of interest is to transfer wealth from one person to another (which money can do very effectively). Having a universal interest rate set for all parties completely defeats the wealth transfer and thus the TIMU becomes just another currency, no different to any other.

But why dont we deposit money with the Government?

I do, but no one has explained to me how to ever get it back again.

But seriously, Niall, I reckon you’ll like Bendigo. Go and join up with a community bank branch, and then as well as good old fashioned customer service you’ll have the warm glow that half the profits are going back to the comunity funding all sorts of good works, instead of into the pockets of the capitalist shareholders of the big banks. You’ll like that, I’m sure.

I’m curious about one thing: who do you bank with? Don’t be shy now. My guess? NAB.

BBB

That changed in the eighties, following greed driven drives towards that first billion in profits. It’s been down hill from there because of black monday 1987 and a series of greed driven fuckups ever since. Check into the corporate history of the NAB. They’re expert fuckup merchants. Just like the losing gambler at a roulette table, the urge is to bet more to recover loses although in the case of banks, it’s up the fees and charges because of the dedicated cadre of dummies, like you and Nicholas, who actually seem to believe you’re getting value for money. Unfortunately, you’re missing the fact that what you’re paying for was once free or very nearly so, because banks didn’t have to chase profits in order to make up for loses incurred through imprudent greed. So, all that greed driven profit chasing has been at dramatic cost to customers, like you and Nicholas, who have been successfully brain-washed into believing that a globalised world borne on the soap-sud credibility of ‘market forces’ and ‘competition’ is delivering you fair service for fair outlay.

Too late for you, old cock. You’re already cuckolded. Hope you enjoy the ‘service’ you’re paying through the eye-teeth for, and apparently enjoying. Just think….you don’t need to experience prison to understand how much your arsehole can hate you. Just ask your wallet, or better still, your bank account statement. You know … the one with all of those money-for-service fees listed down the page.

JC, you miss the point of my comment, as usual.

Will I bite? naaa

These so-called technological services were promoted as free and gratis to suck in the populace. There was never any intent by Banks, per se, to maintain those services free and gratis, but of course, the Banks never made that public knowledge until it was too late for those dedicated users.

So what if they promoted that way years ago and not now? Times change. They were obviously using those tech factors as a test run to see if the public used the new technology and they did.

Their overall return , while decent over the past 10 years, doesn’t really suggest they are making super profits. They were aiming for a 20% EBIT for the most part. Considering the long sustained boom their results were not over the top, so you aren’t getting ripped off, Niall. Stop whining.

Niall, three of us have tried to help you find better service which is something that is obviously disturbing you and you’re biting Nic’s hand despite being told to head off to Bendigo bank.

What service are you wanting exactly?

Couldn’t have put it better myself. Bendigo gives you fine service and hefty margins. Choose your poison.

Oh, and no, I don’t see the parallel between glass milk bottles and real customer service, basically because there isn’t any. Nice analogy, but it’s a disconnect.

Bank service costs something – like those people who used to fill your petrol tank for you. It’s easy for people to lament the passing of such service, but they were effectively given a choice. The market gave them a choice. When petrol stations passed the lower costs of self service onto petrol buyers, that’s where the buyers headed. If you ask them if they’d like to see more service in petrol stations they might well say ‘yes’. But that’s if someone else pays. If they are expected to pay, it’s no dice.

The same has happened with banks. Now it hasn’t happened quite like that. Before banks charged for service and for ATM access they had 4% interest margins. Now they have about half that and so they’re charging fees. This doesn’t mean I feel sorry for them, or that they are making lower profits. They’re not. But banks have tried to sell service – ANZ did for a while with various service guarantees. But it obviously didn’t pay them – or they’d have kept doing it.

So what you’re seeing, old chum, is choice in action. People don’t get bank service because they don’t want it – or at least don’t want it enough to pay for what it costs. In the meantime and entirely by the by, they are getting much, much better service IMHO from the banks computer systems and ATMs.

I hope you can see the analogy with the milk bottles. People say they want something, but sometimes they don’t want it enough to pay for it when they’re given the option.

The crux of my comment, as I’m sure you’re well aware, is that competition doesn’t exist to the benefit of the customer. The same products are offered by a cabal of institutions expressly intent on making profits on the pretext of offering service. There was a time when service secured custom. I’m disappointed that today’s business world, driven by greed, pretends to offer service, while actually putting out the hand for silver before granting anything in exchange.

We move with technology because the pace of life demands that we do so. No-one will ever convince me, however, that the ‘cost’ of real service will ever out-weigh the benefit of doing so. Business management theorem dictates this as fact. I’m sure you’re aware.

Oh, and by the by……just what is the parallel between glass milk bottles in Perth, and customer service in Bank branches?

So if service inside bank branches has gone down, so what? However service outside bank branches has improved. I can just log on to the computer and do my banking. Or I pop down to any old ATM at any old time and get some notes. I call that service.

Still maybe it’s more consoling to lament the days when one needed to go see a bank teller with one’s passbook. I’ll leave that to you.

Nicholas, I doubt you’re old enough to remember real customer service in Bank branches, but rest assured, it did exist. With due respect, milk bottles and competition within the domestic Banking game don’t seem to be relevant parallels to me. Have you experienced the inner workings of the cabal, I wonder?

The thing that concerns me is that, while a lot of data will get converted from one format to the next, a fair bit of it won’t. (In fact, this has already happened.) Additionally, I’d be very surprised if our modern digital media have anything like the longevity of paper or parchment. The point I was trying to make in my earlier post is that the original Domesday Book came very close to still being readable long after the new one wasn’t any more – a lifespan of at least 1000 years asgainst one of perhaps 25.

This is going to make it difficult to write company histories in future, just for a start.

Isn’t this one reason why a number of govts – like the Massachusetts Govt for instance – are promoting open standards, which should remain readable. Also in the age of the internet, it seems to me to be unlikely that major standards will be stranded – won’t people build converters and won’t those converters be kept somewhere accessible on the net? Not that I’m any expert.