On One Nation’s banking inquiry

Christopher Armstrong writes: Re. “One Nation uncovers the squillion-dollar bank conspiracy” (Wednesday)

Unfortunately conspiracy theories sometimes hide an element of truth in them, even the thick and convoluted ones that Roberts is known for. The idea that banks create money out of nothing is not a new one.

Nor should it be a controversial statement – many central banks (notably the Bank of England and the Deutsche Bundesbank) have confirmed it as such. It allows for the investment and speculation that is a key feature of our capitalist economy. Without it, you wouldn’t see the innovation and “creative destruction” that we’re familiar with (nor the outlandish booms and depressions) – the economy would be moribund and stagnant.

And as for the need for deposits – after the loans have been created, banks still need to maintain a certain proportion of reserves, and customer deposits are one of the cheapest ways of doing so.
Banks are still restricted by the amount of debt that customers want to take on, but when all those loans are being used to bid up the price of assets like housing or equities, the money train can keep chugging along for quite a while.

On Tony Abbott and renewable energy

Wayne Cusick writes: Re. “Matthewson: Tony Abbott is completely out of touch on renewable energy and here’s why” (Wednesday)

“If implemented, Finkel’s CET recommendation would fill the policy vacuum created by Abbott when he scrapped the carbon tax and created a lopsided market that only provided policy certainty to renewable energy providers. It’s no coincidence that not one coal-fired power station has been built since then.”

I don’t believe that any coal fired power stations have been built in Australia since the “carbon tax” was introduced. As far as I have been able to find, the last coal fire power station to be built, which is still operating, was commissioned in 1996.